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Posted

Company A and unrelated Company B are participating employers in a multiple employer plan.  

If a terminated participant who worked for Company A is hired by Company B, prior to a 1-year break in service, must the participant be immediately eligible to participate again?

Thank you for your replies.  Please let me know if additional information is needed to address the question.

 

Posted

Generally, that will be the case.

Under IRC 413(c), all service with all adopting employers in a MEP must be recognized. So, you must apply the eligibility provisions of Company B's plan. If the plan requires a YOS to enter and the person had a YOS while working for Company A, then the person enters on date of hire with Company B (assuming no class exclusion applies). The same approach would be used when applying the LTPT employee rules (assuming it's a 401(k) plan).

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