elapsed time - vesting

I have a new plan that has elapsed time for vesting.  I just want to confirm that I am doing this correctly.

The participant would have to be employed on the anniversary date to received vesting credit, correct?

i.e.  date of hire 4/5/2023.  Terminated 12/31/2024.  Therefore, he had 4/5/2023-4/5/2024 = 1 year.  4/5/2024-12/31/2024 = 0

I appreciate your help!

You have it correct for the example you gave.   And yes I have seen people not get the 2nd YOS by leaving the job a day or two before an anniversary.   

The real trick with elapsed time is making sure you don't lose track of the Service Spanning Rule.   

Using your example above if that person was rehired on 10/20/2025 they would get the 2 YOS the day they are rehired and their 3rd on 4/5/2026.   That gap is ignored because of the Service Spanning Rule.   

Thank you ESOP Guy! 

I would disagree. The participant doesn't need to be employed on the anniversary date to receive vesting credit. Under elapsed time rules this participant will receive either 9 or 8 months of vesting service depending on the definition of vesting service. Some plans give 1 month for 1 day of work.

The calculation of eligibility, vesting or benefit accrual using elapsed time rules fundamentally only consider an employee's chronological sequence of hire dates and termination dates.  Here is the general concept.

Imagine a spreadsheet with a column for hire date and column for the subsequent termination date.  Add a column showing the number of days worked by subtracting the hire date from the termination date.  These are days of service.

Now add a column showing the number of days of severance by subtracting the termination from the subsequent hire date. if the number of days of severance is less than 365, consider these severance days as days of service.

Add up all of the days of service.  Count the number of multiples of 365 day in the total and that is the elapsed time.

(The may be some accommodations needed for leap years, and hire/rehires on the same calendar day in different years.)

2 hours ago, Calavera said:

I would disagree. The participant doesn't need to be employed on the anniversary date to receive vesting credit. Under elapsed time rules this participant will receive either 9 or 8 months of vesting service depending on the definition of vesting service. Some plans give 1 month for 1 day of work.

I get your point but since the context was vesting unless there is a very unusual vesting schedule a person can be credited with 1 year and 364 days of service and will still be vested the same as having 1 year of service.  I don't care what the exact service at that point. The person doesn't have 2 YOS is what you need to know. 

20 hours ago, ESOP Guy said:

a person can be credited with 1 year and 364 days of service and will still be vested the same as having 1 year of service.

Not really. Depending on the vested service definition under plan document this person will either have 2 years of vesting service or 1.91667 years of vesting service.