Former employer denying pension benefits - help interpret plan details

[falana]

CA

Hello, thanks for reading...long story short my former employer is denying me my pension benefits due to "ineligibility" as they claim.

I was let go last year due to downsizing and left on good terms. Our pension plan is fully vested after 3 years. They are trying to tell me I did not fulfill the 3 years of service. I started in May of 2010 and left at the end of September 2012. Here is the wording from the plan:

You become an �Eligible Employee� when you have completed one (1) Year of Service. For purposes of Eligibility, A �Year of Service� is a consecutive 12-month period in which you work at least 1,000 Hours of Service. For purposes of becoming a Participant in the Plan, your first consecutive 12-month period begins on your date of hire, and all later consecutive 12-month periods begin on the first day of the Plan Year.

All Years of Service working for the Company will be counted for purposes of computing your vested percentage of your Normal Retirement Benefit.

For vesting purposes, a �Year of Service� is working 1,000 or more Hours of Service during a Plan Year regardless of whether you are a Participant.


As I am calculating, I served 1000 hours in the years 2010, 2011 and 2012 = 3 years.

Please let me know whether or not I am interpreting and understanding this correctly.

Thank you!

 

[ecmst12]

You did not complete 3 consecutive 12 month periods.

 

[falana]

I am understanding "consecutive" to mean no break in service. Meaning minimum 1000 hours accrued with no break with in the 12 months. For example you would not be able to work 120 hours in January, leave work for "x" amount of time, accrue another 400 hours over 2.5 months, leave again for "x" amount of time and come back to fulfill the remaining 480 hours for the minimum 1000 hours.

If the the plan recognizes your date of hire as the start of the first consecutive 12 month period, one could conceivably accrue 1000 hours in 3 consecutive months.

Thanks!

 

[ecmst12]

Right, but you need to work there for 3 full years AND have worked at least 1000 hours each year. If both aren't fulfilled, you don't qualify.

 

[falana]

Okay, here's my confusion, the plan administrator said I have already accrued two years of service. The employer's accountant admitted in error he submitted the incorrect hours for 2012. He should have submitted 1000 hours, but sent in less than 1000. So apparently the first year (not full 12 month calendar period) counts as an eligible plan year, but the last year won't count even if the hours are corrected to my actual 1000 hours of service because I wasn't there until 12/31/12? Why does the first year count then?

 

[swalsh411]

A �Year of Service� is a consecutive 12-month period in which you work at least 1,000 Hours of Service.

You don't have 3 years of service. You do not have 3 consecutive 12-month periods. What are you not understanding about that?

 

[LdiJ]

Okay, here's my confusion, the plan administrator said I have already accrued two years of service. The employer's accountant admitted in error he submitted the incorrect hours for 2012. He should have submitted 1000 hours, but sent in less than 1000. So apparently the first year (not full 12 month calendar period) counts as an eligible plan year, but the last year won't count even if the hours are corrected to my actual 1000 hours of service because I wasn't there until 12/31/12? Why does the first year count then?

Your first year began May of 2010, and ended May of 2011. Your second year began May of 2011 and ended May of 2012. Your third year began May of 2012 and would not have ended until May of 2013. Its completely clear in what you posted that a year is a 12 months consecutive period AND you must work at least 1000 hours in that 12 months.

You are not eligible.

 

[ecmst12]

The calendar year is irrelevant. You would have needed to work there through May 2013 and have 1000 hours in each 12 month period. For example if your first day of work was 5/15/10, your first year of service ended on 5/14/11.

 

[cbg]

I do this for a living. Your interpretation is wrong.

You must be there for three years, with a minimum of 1000 hours in each year. This is not calender years; because you were there for a portion of 2010, 2011 and 2012 does not mean you were there for three years EVEN IF you worked 1000 hours in each of those calendar years. You would not have been there for three years until May of 2013. The rule for vesting is not 3000 hours served in three consecutive calendar years; it is that you have worked for the company for 36 consecutive months and that in each 12 months period - that would be May 2010 through April 2011, May 2011 through April 2012, and May 2012 through April 2013 - you work 1000 hours or more.

Part of this is Federal law and the rest is very standard language for pension agreements which would be readily understood by anyone who works in the Benefits field.

 

[eerelations]

cbg is absolutely correct.

 

[falana]

Thank you all for your answers. It's unfortunate that wasn't explained to me upon my departure when my employer agreed to pay me the pension. The information I received from his business affairs manager was exactly what I described above. This is a significant loss.

 

[swalsh411]

Your employer is not at liberty to violate the rules of the plan.