What: See below
Action Required: No action is required unless this clarification changes the way in which employers choose to administer their DB plan(s)
Key Dates:
Impacted Audiences: Employers with a MERS Defined Benefit Plan that has required employee contributions
For More Information: Contact your benefit plan advisor - 800.767.MERS (6377)
Key Information:
After extensive research of IRS regulations and PERSIA requirements, we’ve made the following determinations regarding the administration of the Leave of Absence provision:
- When mandatory contributions for 401(a) defined benefit plans are in place, employee contributions are required when granting service credit to an employee on a leave of absence. There is not an option for an employee to forego service credit and not pay their required contributions.
- Employers are required to report service credit and employee contributions during the employee’s leave of absence. However, there is flexibility in how the employer chooses to collect these contributions from the employee.