Reemployment and Elective Deferrals

Q. Regarding the 403(b) contribution other than elective deferrals, if a full-time employee who participated in employer contributions and employee deferrals to the 403(b) plan for several years separates from service for three years, but in the position upon return is expected to work less than 20 hours per week on average and does in fact work less than 1,000 hours for the year, should he or she be denied participation in matching or employer contributions assuming the following plan document sections are applicable?
 
The plan document includes the following sections:

1. Regarding contributions other than elective deferrals, the Plan Section 3.02 (iii) states: “Prior Participation: If this is a restatement of a prior plan, every Employee who was a Participant prior to the restatement shall continue to be eligible to participate in the plan,” the Plan Section 3.02 (v) a) states “If a Participant in the Plan incurs a Break in Service and has terminated employment, he or she shall participate in the Plan on the first Entry Date following their reemployment.”

2. The Plan Section 4.02 states, “There is no requirement that a Participant be employed on the last day of the year or work a minimum number of hours during the year in order to receive Matching or Employer Contributions once they have become a Participant in the Plan.”

3. Regarding Section 3.02(v)(a), would there normally be an assumption that the employee returning from terminated employment would be returning at the same level as when they were previously participating?

A. Under the plan document that you reference it seems that once the participant is reemployed they will participate either (1) immediately or (2) if they incurred a break in service, then on the next entry date.