19. Eligibility computation periods

Statement of Requirement: DOL Reg. §§ 2530.202-2(a), 2530.202-2(b)

Sample Plan Language:

For purposes of determining years of service and breaks in service for purposes of eligibility, the initial eligibility computation period is the 12-consecutive month period beginning on the date the employee first performs an hour of service for the employer (employment commencement date).

The succeeding 12-consecutive month periods commence with the first anniversary of the employee's employment commencement date.

(Note to reviewer: The preceding paragraph is not applicable if the eligibility computation period shifts to the plan year.)

The succeeding 12-consecutive month periods commence with the first plan year which commences prior to the first anniversary of the employee’s employment commencement date regardless of whether the employee is entitled to be credited with 1,000 hours of service during the initial eligibility computation period. An employee who is credited with 1,000 hours of service in both the initial eligibility computation period and the first plan year which commences prior to the first anniversary of the employee’s initial eligibility computation period will be credited with two years of service for purposes of eligibility to participate.

(Note to reviewer: The preceding paragraph is not applicable if succeeding eligibility computation periods commence on the 12-consecutive month anniversary of the employee's employment commencement date.)

(Note to reviewer: If the plan has a CODA feature, see LRM #1 and CODA LRM II for provisions regarding eligibility standards applicable to long-term part-time employees.)

Sample Adoption Agreement Language:

169 | D e f i n e d C o n t r i b u t i o n P l a n L R M P a c k a g e 0 1 / 2 0 2 4

For purposes of determining whether an Employee has a Year of Eligibility Service, the computation periods subsequent to the initial computation period will be:

[ ] The 12-consecutive month periods commencing on the first anniversary of the Employee’s employment commencement date and succeeding anniversaries.

[ ] Plan Years beginning with the first Plan Year commencing after the Employee's employment commencement date.