Bill D. Posted September 24, 2020 Posted September 24, 2020 Brain freeze here: Plan has dual elig. & entry, 3 months svc. & quarterly entry for deferrals, and 1 year, semi-annual entry for safe harbor match, safe harbor added in 2019. Two scenarios need help on: Former participant termed 2018, rehired 8/1/2020, was a participant for several years prior to 2018 termination. Is this person eligible to defer and receive safe harbor immediately starting on rehire of 8/1/2020? Similar scenario, but this EE has been working for several years, was eligible in past, but never wanted to defer, he now wants to. Can he start deferring now in paydate 9/25/2020, and also receive the safe harbor for 9/25, or, would he have to wait till 1st paydate after 10/1 deferral entry and would he have to wait till 1/1/2021 to start receiving safe harbor? Thanks in advance.
Lou S. Posted September 24, 2020 Posted September 24, 2020 RTD the answer should be there on rehires, service spanning rules and/or deferral election change timing. #1 on our documemt the participant would be immediately eligible on rehire on 8/1/2020. Your document may be worded differently. #2 what does the plan say about changing deferral election? In our plans we typically allow deferral percentage changes on any payroll and an eligible participant could change their deferral election from 0% to something else as quick as the payroll system can accomadate the change. Now if you're plan document says something like "deferral elections can only be changed quarterly" than the participant could not change from 0% to something until 10/1.
Gilmore Posted September 25, 2020 Posted September 25, 2020 Just curious on Scenario 1. Our document also says that if the employee left as a participant they are a participant upon rehire. But the information just says the employee was a participant, which I'm assuming means he earned 3 months of service in his prior employment. But wouldn't you have to confirm that he also had earned a year of service in his prior employment for him to be eligible to receive safe harbor if the document has that requirement for safe harbor?
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