Figuring Years of Service

Q. What are the rules one should take into account when figuring one’s years of service for purposes of a 403(b)?

A. The rules are as follows: 

• Status of the employer. The years of service include only periods during which the employer was an eligible employer. A plan administrator can provide information regarding whether or not the employer was qualified during all one’s periods of service. 
• Service with one employer. Generally, one cannot count service for any employer other than the one that maintains the 403(b) account.
• Church employee. Church employees should treat all of their years of service with related church organizations as years of service with the same employer. 
• Self-employed ministers. For self-employed ministers, the years of service include full and part years in which he or she has been treated as employed by a tax-exempt organization that is an eligible employer. 
• Total years of service. When figuring prior years of service, one should figure each year individually and then add the individual years of service to determine the total years of service.

Source: IRS Publication 571