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It is my understanding (for what that's worth) that someone who is 100% vested is 100% vested thereafter, and that a break during which the vesting schedule is made more stringent would not, upon reinstatement, lead to new accruals being vested at less than the 100% already attained. It is also my understanding that HCE status and vesting requirements are completely unrelated. Why would care be needed if the rehired person is an HCE? Vested is vested without regard to HCE status.

You can only follow the procedure. If you don't think it protects the plan properly, amend the procedure. Then follow the amended procedure.

We are going with the 100% vested. I enjoyed the dialogue and knowledge gained. I must be strange!! Or proves it even more..... Thanks all!

Unless the amendment says something about rehires-- which it should in my mind. I would go with 100% vested. To me this is a risk/cost thing. How much is it really going to cost the company to vest this person upon rehire vs getting called out on it? Here is the thing it is done often for practical reason but I believe you could amend a plan to say all funds in a persons account as of a given date is vested on sch #1. All funds earned after that date are on Sch #2. The rules only talk about not taking YOS away not how the YOS are applied to any given sch. So if the amendment was drafted to say rehires after this date new money is on sch #2 could be defended. It is the fact the amendment appears to be silent that you are stuck. The real moral of this story is spend more time drafting your amendments to think of this kind of fact patterns.

ETA, way too limiting. One can adopt an operational amendment before plan year end, subject only to 411(d)(6). 2007-44, me thinks. 5.05(2) therein states: (2) In the case of a discretionary amendment (i.e., one which is not an interim amendment described in section 5.02), an employer (or a sponsor or a practitioner, if applicable) will be considered to have timely adopted the amendment, if the plan amendment is adopted by the end of the plan year in which the plan amendment is effective.

I have now contacted an ERISA attorney.

Pension actuaries do, and are required to do, many things that involve the application of law, e.g., ERISA and Internal Revenue Code funding requirements. If an actuary made a mistake in applying minimum funding rules, which are LAW, and as a result the employer got hit with an excise tax, that is malpractice. It is not a stretch to conclude that a failure to mention the 204(h) requirement when an actuary is helping the employer through a freeze is also malpractice.

Don't forget. As part of any self-correction under the mantle of EPCRS, the plan administrator must put in place procedures to ensure the mistake does not happen again. Keep that with the other documentation of the correction.

Practitioners have been processing negative payroll contributions in order to correct over-deposited amounts during previous payroll cycles for the longest time now. I remember back in the early 2000s (or late 1990s) arguing why it was best to correct under the separate transaction and adjust for earnings as opposed to merely disguising the error through a negative payroll contribution. I, distinctly, remember being over-ruled on that argument (at my employer) for sake of operational efficiency. I find it interesting that the conversation, now, is about everything 'we cannot do'. Anytime I encounter a situation where every alternative is fraught with issues, then I suggest that a VCP submission will give you all the comfort you seek. The argument, then, is not about what can or cannot be done (because a Compliance Statement will settle this), but more about whether the level of comfort is worth the cost of the submission; especially when it involves a correction method already being discredited under a self-correction routine. Good Luck!

The 'discretionary' formula is the only one that is limited (to 4% of Compensation). The reason for that is obvious, it's discretionary and will likely not get made if EVERYONE contributes. There isn't a limit to the 'amount' of fixed, only the amount of deferrals that may be matched. Good Luck!

I don't see a big issue with either approach. If a person is entitled to a contribution (e.g. matching contribution) under B's plan, and Bs plan was merged into As plan, then you're still making the contribution to Bs plan which is currently a merged part of As plan. I cannot fathom an issue; it's just a matter of mechanics in how you choose to do it. Good Luck!