Rehired Employees in DC Plans

When a former employee returns to the company, should that person be treated as a new employee and be forced to satisfy eligibility requirements? When should they be allowed into the plan? The answer is not as clear as it seems — as detailed in a recent briefing by Relius.

There are break-in-service rules which may allow the rehired employee to be treated as new, but those exceptions are rare and hard to fit into. If an employee has completed a full year of service in a previous stint, then for the most part he or she can’t be treated as a new employee. The only question that remains is when the rehired employee can enter the plan — on their rehire date or the next enrollment window?