20. All years of service counted toward eligibility except after certain breaks in service

Statement of Requirement: IRC 410(a)(5)(A), 410(a)(5)(B), 410(a)(5)(D); Treas. Reg. 1.410(a)-5

Document Provision: _____

Sample Plan Language:

All years of service with the employer are counted toward eligibility except the following:

If an employee has a l-year break in service before satisfying the plan's requirement for eligibility, service before such break will not be taken into account.

(Note to reviewer: The above provision is only permitted if the plan provides 100% vesting after an employee completes the IRC 410(a)(l)(B)(i) eligibility requirements. See IRC 410(a)(5)(B).)

In the case of a participant who does not have any nonforfeitable right to the accrued benefit derived from employer contributions, years of service before a period of consecutive 1-year breaks in service will not be taken into account in computing eligibility service if the number of consecutive 1-year breaks in service in such period equals or exceeds the greater of 5 or the aggregate number of years of service. Such aggregate number of years of service will not include any years of service disregarded under the preceding sentence by reason of prior breaks in service.

If a participant's years of service are disregarded pursuant to the preceding paragraph, such participant will be treated as a new employee for eligibility purposes. If a participant's years of service may not be disregarded pursuant to the preceding paragraph, such participant shall continue to participate in the plan, or, if terminated, shall participate immediately upon reemployment.

(Note to reviewer: For plan language meeting the requirements of the eligibility oneyear hold-out rule (IRC 410(a)(5)(C)), see LRM #21).