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:

1. 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).
2. 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 on page 14 of this booklet.
3. 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 (except for years of vesting service that are not taken into account because of a break in 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 2009, 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 2010. Mary does not have a one-year break in service because in 2009 or 2010, she was credited with at least 190 hours of service (see above).