DOL Provides Guidance on USERRA’s Application to Retirement Plans

On August 9, 2019, the DOL published a fact sheet that discusses retirement plan sponsors’ obligations under the USERRA. The guidance applies to any retirement plan that provides retirement income to employees or defers payment of income to employees until after employment has ended.

As background, USERRA provides certain protections for employees who must be absent from work due to uniformed service. These protections include reemployment rights, protection from discrimination, and the right to the continuation of group health coverage. As it pertains to retirement plan benefits, USERRA generally requires employers to credit employees with the time they spent on military leave (since many retirement plan contributions are based on employee compensation or time in service).

The fact sheet provides practical guidance on how employers should administer their retirement plans when an employee takes USERRA leave. Since USERRA requires employers to provide returning service members with the same benefits that they would have been entitled to had they remained continuously employed, employers must determine the employee’s eligibility, vesting, and accrual of benefits as if the service member had not left for military service.

Employer contributions to the retirement plan must be made no later than 90 days following the service member’s reemployment. The service member must also be given the chance to make up any missed employee deferrals, although they are not required to do so. The fact sheet also describes how the employer should determine the rate of compensation used to calculate contributions by taking into account the service member’s hours worked prior to the military leave.

Employers should familiarize themselves with this guidance and work with their advisers to provide service members the appropriate retirement benefits upon reemployment.

USERRA Fact Sheet 1 »