Santo Gold Posted May 28, 2024 Posted May 28, 2024 An individual met the 1 YOS/1000 hours requirement in the past and was employed for 15 years. He did not contribute to the plan and has never had a balance. He leaves for 2 years (has 2 BIS) and then returns. The 401k plan does not use the rule of parity and does not use the one year hold out rule. He would be eligible to re-enter immediately, is that correct? Can we ever disregard YOS for eligibility in a situation like this? What if he left after 3 years, was not 100% vested (he did not have a balance regardless), has 3 BIS and then returned? I've checked the document and it is confusing. This has to be addressed in it but without having anything specific to point to that says "disregard the following service..." I do not think we can ever disregard any eligibility service. Any comments are appreciated.
Paul I Posted May 28, 2024 Posted May 28, 2024 Since you note that the plan does not use the rule of parity and does not use the one year hold out rule, it seems you have read the plan document correctly and the individual is eligible to participate upon rehire. Is there other language in the plan document that is causing some confusion? If you have read the plan document correctly, you won't find an explicit statement in the plan document that says otherwise. If you are uncomfortable with your reading of the plan document and have a colleague that is knowledgeable about plans and eligibility rules, ask them if you can give them a copy of the plan document to get their input on how it applies to this individual's circumstances. Luke Bailey 1
Santo Gold Posted May 28, 2024 Author Posted May 28, 2024 I think your comment at the end of the first paragraph is what I was hung up on. I was thinking there would be a statement saying that unless indicated otherwise in the adoption agreement, all service is counted and none is disregarded. But that statement would not appear necessary if we are not using the rule of parity/1 year hold out. Thanks for replying.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now