If an employee returns to work at the same place of employment after military service or a maternity or paternity leave of absence, the employee is generally entitled to vesting credit for the period of absence and certain other rules apply.
If an employee is reemployed after military service, the plan must:
grant vesting and benefit credit for the period of absence;
credit the participant with any allocations of employer contributions to which the participant would have been entitled to if not for the absence (except for earnings and forfeitures);
allow the make-up of employee contributions or deferrals after the return to work;
provide for a suspension of loan repayments until military leave is completed; and
generally limit plan loan interest to 6%.
Maternity or paternity leave
For vesting and eligibility purposes, an employee who is absent from work due to pregnancy or the birth or adoption of a child is treated as having completed the number of hours that would have been credited but for the absence, up to 501 hours of service. The credit for hours of service during the absence is only for determining if a break in service has occurred. See IRC Section 411(a)(6)(E).
- Uniformed Services Employment and Reemployment Rights Act Advisor (U.S. Department of Labor)
- Retirement Topics - Vesting
- Notice 2010-15 (HEART Act provisions relating to military service and retirement plans)
- Revenue Procedure 96-49 (USERRA provisions on veterans' reemployment rights and model plan amendment)
- IRC Section 414(u) (rules relating to veterans' reemployment rights)