Break in Service Rules Clause Samples
The Break in Service Rules clause defines the conditions under which an employee's period of continuous service is considered interrupted or broken. Typically, this clause outlines specific events—such as resignations, terminations, or extended unpaid leaves—that constitute a break, and may detail how such breaks affect eligibility for benefits, seniority, or vesting in retirement plans. Its core practical function is to ensure clarity for both employers and employees regarding the impact of employment interruptions on accrued rights and benefits, thereby preventing disputes and misunderstandings.
Break in Service Rules. The Nonvested Participant Break in Service rule and the One-Year Break in Service rule do NOT apply. (See Section 2.07 of the Plan.) To override the default eligibility rules, complete the applicable sections of this AA §4-3. If this AA §4-3 is not completed for a particular contribution source, the default eligibility rules apply.
Break in Service Rules. The following Break-in-Service rules apply to the Plan.(select 1. or 2.)
1. [ ] Reemployed after five (5) 1-Year Breaks in Service ("rule of parity" provisions) (Plan Section 3.5(e)). The "rule of parity" provisions in Plan Section 3.5(d) will apply for (select one or both):
a. [ ] eligibility purposes
b. [ ] vesting purposes
2. [X] Break-in-Service rules for rehired Employees. The following Break-in-Service rules set forth in Plan Sections 3.2 and 3.5 apply: (select one or both)
a. [X] all Break-in-Service rules set forth in such Sections.
b. [ ] only the following: (specify which provisions apply to the Plan)
Break in Service Rules. [See Section 3.7 and Section 8.2.] Generally, all service completed before a Break in Service will be credited upon reemployment. Certain service may be excluded under the following rules:
a. [ x ] Standard: No exclusions. [See Section 3.7(a).] b. [ ] "One Year Hold Out Rule." [See Section 3.7(b)(1).] This rule, generally, requires rehired Employees to complete a Year of Service before prior vesting and participation service is restored. c. [ ] "Rule of Parity". [See Section 3.7(b)(3).] This rule, generally, disregards vesting and participation service completed before 5 uninterrupted Breaks in Service. d. [ ] "Alternative Maternity/Paternity Rule." [Not applicable if "Elapsed Time" is selected. See Section 3.7(b)(4).] This rule, generally, increases the number of Breaks in Service from 5 to 6 for all Employees in lieu of crediting service for maternity/paternity leave. e. [ ] Alternative to "Buy Back Rule". [See Section 8.2(b).] This rule, generally, does not require former participants (less than 100% vested) to pay back previous distributions upon reemployment (vesting only). A rehired Participant's vested interest in restored amounts will be determined under: [Check one. See Section 8.2(a), Section 8.2(b) and Section 8.2(c).]
Break in Service Rules. The Break in Service rules described in Sections 1.6 and 4.6 also apply under the Elapsed Time Method. For purposes of applying the Break in Service rules under the Elapsed Time Method, a Break in Service is any Period of Severance of at least 12 consecutive months.
Break in Service Rules o a. The Rule of Parity Break in Service rule does not apply for purposes of determining eligibility or vesting under the Plan. [If this selection a. is not checked, the Rule of Parity Break in Service Rule applies for purposes of eligibility and vesting. (See Sections 1.6 and 4.6 of the BPD.)]
o b. One-year holdout Break in Service rule.
o (1) Applies to determine eligibility for: [Check one or both.] o (a) Employer Contributions (other than Section 401(k) Deferrals). o (b) Section 401(k) Deferrals. (See Section 1.6(c) of the BPD.)
o (2) Applies to determine vesting. (See Section 4.6(a) of the BPD.)
Break in Service Rules. The following Break-in-Service rules apply to the Plan. (Select 1. or 2.)
1. [ ] Reemployed after five (5) 1-Year Breaks in Service ("rule of parity" provisions) (Plan Section 3.5(e) and (f)). The "rule of parity" provisions in Plan Section 3.5(e)/(f) will apply for (select one or both):
a. [ ] eligibility purposes
b. [ ] vesting purposes
2. [ ] Break-in-Service rules for rehired Employees. The following Break-in-Service rules set forth in Plan Sections 3.2 and 3.5 apply: (select one or both)
a. [ ] all Break-in-Service rules set forth in such Sections.
b. [ ] only the following: (specify which provisions apply to the Plan) NOTE: If 16.c of the Adoption Agreement is selected and rehired employees are treated as a new hire, the options under this B.c. are not applicable.
Break in Service Rules. The Nonvested Participant Break in Service rule (see Section 2.07(b) of the Plan) and the One-Year Break in Service rule (see Section 2.07(d) of the Plan) do NOT apply. Governmental Plans are not subject to the Break in Service rules under Title I of ERISA and can modify the Break in Service rules of the Plan accordingly. To override the default eligibility rules, complete the applicable sections of this AA §4-3. If this AA §4-3 is not completed for a particular contribution source, the default eligibility rules apply. 🞎 🞎 (a) Year of Service. Instead of 1,000 Hours of Service, an Employee earns a Year of Service upon the completion of Hours of Service during an Eligibility Computation Period. 🞎 🞎 (b) Eligibility Computation Period. The Plan will use Anniversary Years for all Eligibility Computation Periods. 🞎 �� (c) Elapsed Time method. Eligibility service will be determined under the Elapsed Time method. An Eligible Employee (as defined in AA §3-1) must complete a period of service to participate in the Plan. [Note: Under the Elapsed Time method, service will be measured from the Employee’s employment commencement date (or reemployment commencement date, if applicable) without regard to the Eligibility Computation Period.]
Break in Service Rules. The Rule of Parity Break in Service rule applies for both eligibility and vesting but the one-year holdout Break in Service rule is NOT used for eligibility or vesting. [To modify, complete #45 below.]
Break in Service Rules. The Nonvested Participant Break in Service rule and the One-Year Break in Service rule do NOT apply. (See Section 2.07 of the Plan.) To override the default eligibility rules, complete the applicable sections of this AA §4-3. If this AA §4-3 is not completed for a particular contribution source, the default eligibility rules apply. Match ER 🞎 🞎 (a) Year of Service. Instead of 1,000 Hours of Service, an Employee earns a Year of Service upon the completion of [must be less than 1,000] Hours of Service during an Eligibility Computation Period. 🞎 🞎 (b) Eligibility Computation Period (ECP). The Plan will use Anniversary Years, unless more than one Year of Service is required under AA §4-1(a), in which case the Plan will shift to Plan Years. 🞎 �� (c) Elapsed Time method. [Check the same contribution source as checked in AA §4-1(a)(6) above.] Eligibility service will be determined under the Elapsed Time method. An Eligible Employee (as defined in AA §3-1) must complete a [not to exceed 24 month] period of service to participate in the Plan. (See Section 2.03(a)(5) of the Plan.) [Note: If a period greater than 12 months applies to either Matching Contributions or Employer Contributions, 100% vesting must be selected under AA §8 for those contributions.]
Break in Service Rules. The Rule of Parity Break in Service rule does not apply for purposes of determining eligibility or vesting under the Plan. [If this selection a. is not checked, the Rule of Parity Break in Service Rule applies for purposes of eligibility and vesting. (See Sections 1.6 and 4.6 of the BPD.)]