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Breaks In Service
Can Credited Service For Retirement Payments Be Lost Or Cancelled?
Yes, through a break in service. The current rules on breaks
in service are as follows:
- General. If
you have a break in service before becoming vested in your benefit, your previous
credit is cancelled. However, such a break may be repaired by a sufficient
amount of subsequent service (see (b) below).
- Temporary Break.
One-year break in service. You have a one-year break in service if in any
calendar year you fail to complete at least 190 hours of service. The effect
of this break is eliminated if, before having a permanent break in service,
you earn a year of vesting service. The credit that was cancelled by the one-year
break in service is then restored to you. You will not have a temporary break
if you are on a period of absence as outlined here in the booklet.
- Permanent Break In
Service. You have a permanent break in service if you have consecutive
one-year breaks in service, including at least one after 1985, that equal
or exceed the greater of five years or your years of Vesting Service. For
example, if you have three years of Vesting Service and then have five or
more consecutive one-year breaks in service, at that point, your previous
credit of three years is permanently lost.
Different rules apply with respect to breaks in service
prior to 1986.
Effective January 1,
1989, once you have accumulated at least five (5) years of vesting
service, your benefit is non-forfeitable, and your credit cannot be cancelled.
Protection Against a Break in Service
Parental leave. Effective
January 1, 1985, you will not have a one-year break in service if
you leave work because of pregnancy, childbirth, adoption, or infant care. While
you are not working for these reasons, you will receive credit for a maximum
of 501 hours of service. This credit only prevents a break in service. It does
not count toward Future Service or Vesting credit.
This break-in-service protection will apply to either:
- the year your absence starts, if you have less than 190
hours of service in that year; or
- the following year, if you have completed 190 hours of
service in the year your absence starts.
Here is an example of when you receive break-in-service
protection for a parental leave:
Suppose Mary's credit year starts January 1 and ends December
31. In 1988 Mary completes 380 hours of service as of March 31. On April 1 she
leaves work for the rest of the credit year and the following credit year to
care for a child she adopted. Mary will receive credit for enough hours of service
so that she will have a total of 501 hours of service for 1989. Mary does not
have a one-year break in service because in 1988 or 1989 she was credited with
at least 190 hours of service (see here).
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