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Vesting on non-ERISA 403(b) plan


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Just want to see if I'm nuts here. Suppose you have a public school, hence non-ERISA. Their 403(b) plan has a matching contribution piece.

For vesting purposes, the document, as I suspect most do, defines a "year of service" for vesting as 1,000 hours.

They would like a "last day" requirement - in other words, to receive a year of service for vesting, you must also be employed on the last day.

Is there any reason this can't be done?

Personally, I suspect that this won't be allowed under IRS prototypes when they are finally available, but then again, maybe it will.

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