A small company merges nto another small company.

The new small company now adopts the plan and the first plan year is to be a short plan year from 4/1/07 to 6/30/07 with each subsequent plan year from 7/1 to 6/30.

In order to receive a year of credited service the plan requires 500 hours during a plan year.

As far as I can see, if the participant works 500 hours during 4/1/07 to 6/30/07 then the participant can recieve one year of credited service.

Does anyone have concrete evidence indating otherwise?
Thanks.

Why wouldn't you pro rate the hours for the short plan year? Were 2000 hours required for a year of credited year of service under the merging plan? Thanks! Carol

What are the terms of the plan for short plan years?

Right!
If the plan is ambiguous on how to handle the short plan year, amend away the ambiguity. For example, credited service may be different from vesting service.

The plan provides for a year of credited service, but I was wondering if there was any statutory provision that would preclude from accruing a year of credited service in a 3 month plan year.
Thanks.