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Posted

Employer is winding down, and let go off an employee prior to termination of the plan.  Employer wants to re-hire the former employee on a P/T or TEMP basis.  The former e/e is a pension plan participant, is now a retiree and began monthly pension payments in July. If rehired and plan was in effect, benefit would be suspended.  Can the employer re-hire this ex-employee without impacting his monthly pension payments, now that the plan is terminated?

Posted

If working <40 hours a month the SoB would not apply anyway. The definitive answer lies in the group annuity contract placed with the insurer that is now providing the monthly annuity benefits. I do not know if suspension of benefits provisions must be included in those contracts, but would think most/all insurers might want those administrative complexities taken out.

If the plan termination process has not yet progressed to that stage you are still bound to follow the plan document.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services

kprell@bpas.com

Posted

I ranted about this issue a few years ago.  My opinion is unchanged.  Especially when a plan is frozen, any "suspension on rehire" provision is contrary to the needs of the plan sponsor and causes no harm to the plan itself.

 

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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