Brian Kanner, a law student at Emory University School of Law, has published an interesting article which reviews USERRA requirements with the protections provided to pregnant women. While the title is unfortunate – Reservists are Like Pregnant Women – A Fertile Battleground for a Reinterpretation of USERRA – the article provides a very good general review of USERRA as it applies to employee benefits, and is a quick read.
The article is a good reminder to take a look at the language in the plan document on USERRA, especially for cross-tested plans, while working on contribution projections for next year.
Also, with the announcement earlier this week that the law firm of Tully, Rinckey & Associates is teaming up with the American Federation of Government Employees to help federal reservists pursue backpay claims, it is possible that ERISA claims are next for reservists who may have their years of service improperly calculated for allocation and vesting purposes.
The IRS provides LRMs with suggested plan language for defined contribution prototype plans. For USERRA language, the IRS provides this suggestion:
Notwithstanding any provision of this plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with ยง414(u) of the Internal Revenue Code.
The suggested language in the LRMs for maternity and paternity leave is:
Solely for purposes of determining whether a break in service, as defined in section _____, for participation and vesting purposes has occurred in a computation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the hours of service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. The hours of service credited under this paragraph shall be credited (1) in the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period, or (2) in all other cases, in the following computation period.
The obvious difference between the two is that the employee on maternity or paternity leave is treated as if they will be automatically returning to work at the end of the maternity or paternity leave, and the reservist is treated as if they are not automatically returning to work but instead are being rehired by the plan sponsor once they return to work.
Additional information:
[tags]Pension Protection Act, ppa, IRS, USERRA, reservist, 414(u), ERISA[/tags]
“Unfortunate title” for the article … that is an understatement!