According to federal law, under a defined benefit pension or defined contribution plan, individuals whose employment is interrupted by federal military service must be given benefit accruals for the period of military leave if the following criteria are met:
1. Upon discharge from military service, the individual must return to employment with the participating employer within the designated timeframe that depends on the length of the military service*; and
2. Separation from military service must be under honorable conditions, where this designation is applicable.
*Depending on the length of military service, employees are entitled to take from 1 to 90 days following their return before reporting back to work or applying for re-employment. This period of time must be treated as continuous service with the employer for purposes of determining participation, vesting, and accrual of pension benefits under the plan.
A general overview of requirements to accrue service credit for the military leave period in question is:
» For service of 1 to 30 days, employees are expected to return to work by the beginning of the first regularly scheduled work day that would fall 8 hours after the end of the calendar day.
» For service of 31 to 180 days, an application for re-employment must be submitted no later than 14 days after completion of the military service.
» For service of 181 days or more, an application for re-employment must be submitted no later than 90 days after completion of the military service.
Please note: there are exceptions to these timeframes that may allow an employee more days before returning to work than indicated above.
United States military service is eligible for service credit when appropriate payments, as determined by our office, are made by the employee, the participating employer, or the employee and participating employer jointly, in accordance with the law governing the system in which the employee is participating at the time of the official call to duty. Military service under federal authority is protected by the Uniformed Service Employment and Re-employment Rights Act (USERRA). Service under federal authority includes active duty performed under Title 10 of the United States Code and service under Title 32 of the United States Code, such as active duty for training, inactive duty training, or full-time National Guard duty.
Payments must be made before the employee’s retirement date, either during the period of United States military service or subsequent to the military service within a period not to exceed three times the length of military service, up to a maximum of five years. If payments are made subsequent to the military service, interest may be assessed.
If an employee is covered under a noncontributory retirement system, employers must pay the entire contribution, as well as any 401(k) contributions that would have been paid, had the employee not left employment.
If an employee is covered under a contributory retirement system, they must pay the employee portion of the contribution, if applicable, while employers must pay the employer paid portion of the contribution, as well as the required system account employer contribution.
1. Complete Sections A and B of the Leave Notification (Form MELV-1) and submit a copy of the form to our office if the contributions reported to URS for the employee represent hours below the minimum required for eligibility in a URS retirement system, along with a copy of the official call to duty. Maintain the original Leave Notification in the employee’s personnel file. When the employee returns from duty, complete Section C of the form, make a copy for the employee’s personnel file, and send the original Leave Notification to our office with a copy of the DD Form 214 (military discharge), where applicable.
2. To avoid paying interest charges and to avoid completion of the Leave Notification, report contributions during the time of service as part of the regular contribution file data; or
3. Delay reporting contributions until after the employee returns to work. The employer will then be billed for a contribution adjustment, including interest. For computing purposes, an employee’s compensation during the period of military service is at the same pay rate as it would have been had the employee not been called to military service.
If the contributions to the defined benefit (pension) are remitted to our office during the period of military leave, and the employee does not return to work, URS will reverse the contributions deposited into the employee’s account and credit the contributions back to the employer’s clearing account once proper written notification is made to our office. Contributions made to the URS 401(k) and/or 457(b) Plans are only reversed if the contributions were made within 12 months of the employer notifying URS that the employee who was on military leave did not return to employment. Employers should explicitly indicate their desire to have the 401(k)/457(b) savings plans deposits credited back to them at the time of the notification. The savings plans reversal will reflect the lesser of the contributions reported or the current market value at the time of adjustment.