22. Eligibility break in service, one year hold-out rule

Statement of Requirement: DOL Reg. § 2530.200b-4(b)(1); Code § 410(a)(5)(C)

(Nonstandardized plans only)

Sample Plan Language:

In the case of any participant who has a 1-year break in service, years of eligibility service before such break will not be taken into account until the employee has completed a year of service after returning to employment.

Such year of service will be measured by the 12-consecutive month period beginning on an employee’s reemployment commencement date and, if necessary, subsequent 12consecutive month periods beginning on anniversaries of the reemployment commencement date.

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

Such year of service will be measured by the 12-consecutive month period beginning on an employee’s reemployment commencement date and, if necessary, plan years beginning with the plan year which includes the first anniversary of the reemployment commencement date.

(Note to reviewer: The preceding paragraph is not applicable if the eligibility computation period is measured with reference to the employment commencement date.)

The reemployment commencement date is the first day on which the employee is credited with an hour of service for the performance of duties after the first eligibility computation period in which the employee incurs a one-year break in service.

If a participant completes a year of service in accordance with this provision, his or her participation will be reinstated as of the reemployment commencement date.

(Note to reviewer: If the plan has a CODA feature, see LRM #1 and CODA LRM II

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for provisions regarding eligibility standards applicable to long-term part-time employees.)