Eligibility Computation Period

Hi All:  Appreciate comments on the following question:

If a calendar year 401k plan changes it's eligibility computation period from anniversary year to plan year - the amendment is effective 5/1 - rather than 1/1 - how does that affect a participant that was hired on 9/10/2015?  One year of service for eligibility (1000 hours).  1 YOS would be 9/9/2016.  If not 1000 hours during this period - we look at 9/10/2016 - 9/9/2017.  But the amendment was effective 5/1/2017 - so do we look now at plan year 1/1/2017 - 12/31/2017 or does it switch to plan year for the 2018 plan year (prospective from the date of the amendment)?  If this is not clear enough or if more facts are required, let me know and I'll try to elaborate.  Thanks!

You would have an overlapping period in the year of amendment.  So, if the participant doesn't work 1000 hours between 9/10/2016 - 9/9/2017, then you would measure from 1/1/2017 - 12/31/2017.  You wouldn't start a "NEW" period at 9/10/2017 because the plan has been amended prior to that point.

Good Luck!

Thank you!  Makes sense.