Question

rules of elpsed time

Answer 1

Elapsed time.

(a)In general -

(1)Introduction to elapsed time method of crediting service.

(i) 29 CFR 2530.200b-2 sets forth the general method of crediting service for anemployee. The general method is based upon the actual counting of hours of service during the applicable 12-consecutive-monthcomputation period. The equivalencies set forth in 29 CFR 2530.200b-3 are also methods for crediting hours of service during computationperiods. Under the general method and the equivalencies an employee receives a year's credit (in units of years of service or years of participation) for a computation period during which theemployee is credited with a specified number of hours of service. In general, anemployee's statutory entitlement with respect toeligibility to participate, vestingand benefit accrual is determined by totalling the number of years' credit to which an employee is entitled.

(ii) Under the alternative method set forth in this section, by contrast, an employee's statutory entitlement with respect to eligibility to participate, vesting and benefitaccrual is not based upon the actual completion of a specified number of hours of service during a 12-consecutive-month period. Instead, such entitlement is determinedgenerally with reference to the total period of time which elapses while the employee is employed (i.e., while theemployment relationship exists) with the employer or employersmaintaining the plan. The alternative method set forth in this section is designed to enable a plan to lessen the administrative burdens associated with the maintenance of records of anemployee's hours of service by permitting each employee to be credited with his or her total period of service with theemployer or employersmaintaining the plan, irrespective of the actual hours of service completed in any 12-consecutive-month period.

(2)Overview of the operation of the elapsed time method.

(i) Under the elapsed time method of crediting service, aplan is generally required to take into account the period of time which elapses while theemployee is employed (i.e.,while the employment relationship exists) with theemployer or employersmaintaining the plan, regardless of the actual number of hours he or she completes during such period. Under this alternative method of crediting service, an employee's service is required to be taken intoaccount for purposes ofeligibility to participate andvesting as of the date he or she first performs an hour of service within the meaning of29 CFR 2530.200b-2 (a) (1) for the employer or employersmaintaining the plan. Service is required to be taken intoaccount for the period of time from the date the employee first performs such an hour of service until the date he or she severs from service with theemployer or employersmaintaining