Anniversary date entry when hired on the 2nd day of a month

I have a client whose plan document says:

A person enters the plan after 1 year of service with quarterly entry dates.   The plan is clear you enter on the entry date coinciding with and next following meeting the entry requirements.   

A person hired on 10/2/2023 has 1,000 hours by 10/1/2024.  I would always say this person enters on 10/1/2024. 

My client is asking for a cite.  I really am thinking there is an IRS regulation that covers this situation.   I just am not finding it. 

Can I get some help from the smart people out on this board?  Does anyone know if it is in the regulations and where it is? 

Thanks in advance 

Not super smart, but I agree.  Why does the client disagree?  

I usually explain it by building up with other examples. 

Abby is hired 12/17/2021, completed one year of service on 12/16/2022, enters 1/1/2023

Bobby is hired on 1/1/2022 has completed one year of service as of 12/31/2022. They enter 1/1/2023. 

Callie is hired 1/2/2022, has completed one year of service on 1/1/2022, they enter 1/1/2023 since it coincides. 

Danny has to be 5'2" to ride the coaster, then usually being exactly that height is good enough. They don't have to be more than that height. 

Emily finished the 8th grade and June 4th was her last day of school. She is done as of that day, she doesn't have to wait until the next day, or the next school year for that so be true.  

34 minutes ago, justanotheradmin said:

Callie is hired 1/2/2022, has completed one year of service on 1/1/2022, they enter 1/1/2023 since it coincides.

I would disagree with this. Callie completed one year of service at 1st second of 1/2/2023 and therefore cannot enter on 1/1/2023

1 hour ago, ESOP Guy said:

A person hired on 10/2/2023 has 1,000 hours by 10/1/2024.  I would always say this person enters on 10/1/2024. 

On a contrary, I would never say that this person enters on 10/1.

I believe this question was discussed multiple times over many years, and people always had different opinions. Some from this board even changed their opinions over time.

I am not aware of any official cites covering this question.

The only article I found support entrance on 1/1/2025 in this case - https://williamskeepers.com/retirement-plan-deficiencies-a-look-at-the-most-common-mistakes-part-2/

And this is what Google's AI said:

The entry date, coinciding with and next following one year from your hire date of 1/2/2021, is 1/2/2022.

Explanation:
The question specifies that the entry date is one year after the hire date. A year from 1/2/2021 is 1/2/2022.
The phrase "coinciding with and next following" means the entry date is either exactly one year from the hire date or the first date after that which is designated as an entry date. Since you were hired on the 2nd of January, one year from that date is also the 2nd of January. Therefore, the entry date is 1/2/2022. 

For what it is worth this is what I am thinking about. 

https://www.law.cornell.edu/cfr/text/29/2530.202-2

I quote (you can use link to read full context)

For example, in the case of an employee who begins employment in January 1977, the employee's initial eligibility computation period begins on January 1, 1977 and ends on January 31, 1978. If the employee completes 879 hours worked in the initial eligibility computation period, the employee is treated as having met the plan's service requirements for eligibility to participate as of December 31, 1977. If the plan provides for semi-annual entry dates of January 1 and July 1, and the employee has met any eligibility requirements of the plan other than the minimum service requirement as of December 31, 1977, the plan must provide that the employee commences participation as of January 1, 1978.

You can claim it isn't the best example as it is talking about a situation where a person hired in Jan is assumed to be a 1/1 hire but note it does say that a person meets the requirements by 12/31. 

The ERISAoutline seems to pick up on this and agrees you if you meet the requirement by the day before the anniversary date you have your year of service. 

I have always explained it you have to count the day they were hired as day 1.  If you count from 1/2 to 1/1 of the following year you get 365 days.  So a person who is hired on 1/2 has 1 year of service on the following 1/1.  If the plan says coinciding with you enter you have it made.  My 10/2 person has 365 days on 10/1/2024.  Note documents don't say 1 year anniversary it says 1 year of service so you don't count like a birthday or anniversary.  

2 hours ago, Calavera said:

I would disagree with this. Callie completed one year of service at 1st second of 1/2/2023 and therefore cannot enter on 1/1/2023

I disagree back.  They complete the 1 YOS on the last second of 1/1/2023.

7 minutes ago, ESOP Guy said:

I have always explained it you have to count the day they were hired as day 1.  If you count from 1/2 to 1/1 of the following year you get 365 days.  So a person who is hired on 1/2 has 1 year of service on the following 1/1.  If the plan says coinciding with you enter you have it made.  My 10/2 person has 365 days on 10/1/2024.  Note documents do say 1 year anniversary it says 1 year of service so you don't count like a birthday or anniversary.  

I agree with this. The documents don't usually say "a year and a day of service" they usually mention a year. 
Looking at a basic plan document for a major provider, it says computation period for purposes of eligibility and regular 1 year of service is "12-month period beginning on the Employee's Employment Commencement Date". 
The anniversary date option also mentioned in the basic plas document - is described as "12-month period which commences with the Employee's Employment Commencement Date or which commences with the anniversary of the Employee's Employment Commencement Date"

If I use @Calavera's reasoning each anniversary date would be both the first date of the computation period as well as the last date of the prior computation period. 

The specific language will vary by document provider, but double counting a date doesn't make sense to me. That's like saying 1/1 is both the first day of the new plan year and the last day of the prior. 

This discussion most commonly comes up when an employee's service starts a day after an Entry Date.  It sometimes helps to consider the how the entry date would be under similar circumstances but applied to a different set of dates.

For example, if an employee is hired on January 1st (which is a plan Entry Date) and completes 1000 hours on December 31st (the last day of the first Eligibility Computation Period), would that anyone consider the employee to have entered the plan on December 31st?

1 hour ago, Paul I said:

For example, if an employee is hired on January 1st (which is a plan Entry Date) and completes 1000 hours on December 31st (the last day of the first Eligibility Computation Period), would that anyone consider the employee to have entered the plan on December 31st?

if the entry date was immediate (not quarterly) upon satisfaction on the service and eligibility conditions, yes, December 31 makes sense to me. 
 

Folks should also check your software providers. The one I use defaults to a year of service ending on 12/31 if the date of hire is 1/1, but does have an option to change that to end on anniversary date instead. 

How software is programmed is not determinative of course, but might be helpful in know how others choose to count a year if you are on the fence about it. 

2 hours ago, Paul I said:

This discussion most commonly comes up when an employee's service starts a day after an Entry Date.  It sometimes helps to consider the how the entry date would be under similar circumstances but applied to a different set of dates.

For example, if an employee is hired on January 1st (which is a plan Entry Date) and completes 1000 hours on December 31st (the last day of the first Eligibility Computation Period), would that anyone consider the employee to have entered the plan on December 31st?

I don't understand your example and question.  If the plan says you enter on the entry date coinciding  with our next following meeting the requirements the next entry date is 1/1 not 12/31.  There is no coinciding on 12/31.   On the other hand if we have a plan that say a person enters retro back to the first day of the plan, 1/1 for a calendar plan, I would say the person who met the service requirement on 12/31 enters retro back to 1/1 of the same year.  This isn't hypothetical we have clients where I work that is how we advise out clients to handle a 1/1 hire who worked 1,000 hours in a year with a retro 1/1 entry date. 

I posted the comment as a question to see if anyone would say 12/31 (or something other than 1/1).  It's clear that given the assumed provisions, the answer is the entry date is 1/1 following the employee's completion of the first ECP. 

I, too, have clients that will retro back to 1/1 of the current year, but those provisions are clearly stated in the document.

Because January 1 is a "special date".  Since it is usually a holiday, almost no one starts a new job on that date, in which case, many Employers will interpret their document: an employee hired on 01/02/yy will enter on 01/01/yy+1.  (It happened to me once.)  This policy might not apply to any other dates.  Accordingly, I suggest trying other dates for your analysis.