Advisory Opinion 1975-18

Dear :

This is in response to your letter requesting an exemption from the definition of “employee” for fulltime students under the provisions of the Employee Retirement Income Security Act of 1974 (P.L. 93-406, 88 Stat. 829, 29 U.S.C. 1001 et seq.). In support of this request, your letter states that student employees of educational institutions have not yet embarked on their employment careers and should not, therefore, be considered as eligible employees for pension purposes.

Although we recognize your concern, the pertinent provisions of the Act are quite specific and there is no provision authorizing the Secretary of Labor to grant permanent exemptions from these provisions. An employee is broadly defined by the Act as “. . .any individual employed by an employer.” Employees who complete 1,000 hours of service within the applicable 12-month computation period are to be credited with a year of service for eligibility to participate in an employee pension benefit plan and for attaining a nonforfeitable (vested right) to accrued benefits derived from employer contributions. In addition, those employees who are participants in a pension plan are to be credited with at least a ratable portion of the yearly accruable benefits upon the completion of 1,000 hours of service during a 12-month period.

Plans may, however, adopt certain provisions to ensure that pension benefits will only inure to employees with substantial periods of service. Generally, plans are permitted to require the attainment of age 25 and one year of service to participate in the plan but may, where immediate vesting is not provided, require attainment of age 25 and three years of service or, in the case of plans benefiting employees of educational institutions (especially pertinent here), attainment of age 30 and one year of service. Moreover, plans may choose any one of three alternative vesting schedules provided by the Act, including a formula that provides no vesting until completion of 10 years of service.

I hope this information is useful to you.