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Breaks in Service & Rehired Employees [2019]
Date: 5/28/2019 Start Time: 12:00 PM (ET) Duration: 60 Min.

Description
Working with Boomerangs: Breaks in Service and Rehired Employees

Among the more challenging eligibility questions that confront retirement plan practitioners are questions relating to rehired and part-time employees. When does a rehired employee re-enter/enter the plan? Can a plan exclude part-time employees? How may the plan define part-time employees? When and how do the break-in-service rules affect rehired and part-time employees? Does the one-year hold out rule apply to a 401(k) plan? What vesting years of service must the plan credit for a rehired employee? Does it matter whether the participant received a cash-out distribution? If the rehired participant is receiving distributions, do you stop the distributions? Surprisingly, these questions arise often. While these are frustrating issues in administration, they are also important considerations in plan design. Should the employer use break-in-service rules? How much good will they do? How much confusion will they cause?

Topics include:
  • When do rehired employees re-enter/enter the plan?
  • When and how do the break-in-service rules apply?
  • Can you utilize the one-year hold-out rule in a 401(k) plan?
  • When can the plan treat the rehired employee as a new employee?
  • Distributions to rehired employees
  • Crediting vesting service for rehired employees
Prerequisites:

There are no prerequisites or advance preparation for this program. The instructor will assume attendees are familiar with preapproved plan documents and with the operation of 401(k) plans.

Level: Intermediate
Instructional Delivery Method
Group – Internet-Based

NASBA Field of Study: Taxes

Speaker: David Schultz, J.D.

Objectives: After the seminar, attendees should be able to:

  1. Determine when a rehired employee enters the plan
  2. Apply the break-in-service rules correctly
  3. Determine whether the break-in-service rules will benefit an employer
  4. Determine when the plan may treat a rehired employee as a new employee
  5. Determine how to administer the eligibility rules where there is missing service data

How to participate

You will need a phone (speakerphone, for multiple participants sharing the Primary registrant’s authorized connection) and Internet Access. The graphics presentation and illustrations will be viewed via the Primary registrant’s Web connection, while the speaker audio portion will be via the Primary registrant’s telephone. Important Note: The user registrant must be logged in via the internet for CE purposes. Select the "Fees" link on the right side menu of this page for more information about who is authorized to connect to the program, and for the cancellation/transfer policy.

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