I have a client with a PS Plan with a 5/31 year end. Currently the plan's eligibility is Age 21 and six months of service. Entry date is on 6/1 after meeting eligibility.

Employee A, over age 21, was employeed 8/23/04 and should enter the plan on 6/1/05.

Client is wanting to amend his plan's eligibility to Age 21 and One Year of Service with the amendment effective 6/1/04. Will this keep Employee A from entering the plan on 6/1/05? Or since she has not entered the plan yet, will she fall under the new eligibility rules?

Thanks.

In my opinion she has already satisfied both the age and service condition and is now just waiting the entry date. If she remains employed I would say she enters 6/1/2005.

I also don't see how they can amend the plan retroactive to 6/1/04 for changes that are more restrictive, though a liberalizing amendment (i.e., more generous) applied retroactively would be ok.

If this information is complete, doesn't it fail to satisfy the requirements of Code Section 410(a)(4)(B)?

I have the same question as WDIK, isn't there a problem with 410(a)(4)? Under the facts provided employees may have to wait more than 6 months to enter the plan after meeting statutory age & service requirements.

As a general proposition why couldn't you delay, or possibly even eliminate, an employee's participation status by amending the service requirement?

Statutory service requirement is one year; the plan's 6 months requirement with entry on a single following date should always be OK.

I believe you can amend eligibility after a participant has satisfied the requirements. Do a search on "North Shore Auto" for a similar case.

The entry date issue aside, I disagree with the conclusion that you cannot make eligibility more restrictive. There have been other posts on this subject, but basically, eligibility is not a protected right. You could even raise the eligibility requirement after a person has entered the plan. As long as you aren't cutting back a benefit earned, you are fine.

Its the age. Wouldn't you need 20 1/2 for a single entry date following completion?

Also post indicate amendment would be 1 year with a single entry date following completion. Doesn't that also present a problem?

Ah, good point. I'm guessing it was really 20 1/2 but we'll have to wait for the original poster to respond.



It doesn't say that they are keeping the single entry date but I agree that would be a problem.

Sorry to be so long in responding. The amendment would be Age 21, 1 YOS with dual entry dates.

Thanks for all the responses.

I am assuming entry dates would be 06/01 & 12/01.

Based on the facts you've provided I see no reason plan could not be amended & thus have the effect of delaying entry for the employee in question until 12/01.

Yes, the entry dates would be 6/1 and 12/1. Thanks for your response R Butler. That is what I was wanting to hear.