Carpenters Individual Account Pension Plan

Breaks in Service and Termination 

If you are not vested in any subaccount in this plan and work less than 500 covered hours in a calendar year, you incur a one-year break in service. If you have five consecutive one-year breaks in service, you incur a permanent break in service and all credited service and contributions from that credited service are forfeited and permanently lost. Even if you become vested in the employer contributions made on your behalf in this plan at a later date, previously forfeited service and contributions cannot be counted toward your retirement benefit.

401(k) elective contributions, 401(a) supplemental contributions and rollovers into the plan are vested beginning with the initial contribution and are not subject to forfeiture. So, if you are eligible for and choose to make 401(k) elective contributions, your previous service cannot be forfeited under the permanent forfeiture rule described above. However, your service after you have five consecutive one-year breaks in service is not taken into account for purposes of vesting your employer contributions before the break. As a result, any unvested employer contributions for the period before the break would be permanently forfeited.

Key Point

If you are not vested in any subaccount in the plan and not working on a regular basis under this plan, there are several plan rules which may allow you to avoid a permanent break in service prior to becoming vested. Once vested under this plan, you are no longer subject to breaks in service. The following four plan provisions may help you avoid a break in service:

  • Reciprocal plan service.
  • Money follows the carpenter.
  • Leave of absence.
  • Contiguous noncovered service.

The following plan rule may help you avoid a permanent break in service:

  • Five year rule.

Please see Avoiding Breaks In Service below and Avoiding A Permanent Break In Service or contact Retirement Services at Carpenters Trusts for assistance.

Last Updated: 07/21/2021