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Showing results for tags 'cash balance plan vesting'.
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Data for Question Plan effective date: 1/1/2008. Type of plan: Applicable defined benefit plan (cash balance). Vesting service: Plan years in which the employee works at least 1,000 hours. Normal retirement age: 62. The plan has the most restrictive method allowed under IRC section 411 for determining vesting. The employees shown below were originally hired on 1/1/2011. No employee has left service under the terms recognized under the special rule for paternity and maternity absences. Employee 1 Employee 2 Employee 3 Employee 4 Age at hire 18 25 16 60 2011 hours 1,901 1,956 1,325 1,254 2012 hours 1,850 0 700 565 2013 hours 1,251 1,210 1,743 779 2014 hours 1,801 355 943 1,645 2015 hours 1,583 1,479 1,100 560 Question How many of the employees listed above are vested by 1/1/2016? (A) 0 (B) 1 (c ) 2 (D) 3 (E) 4 According of SOA answer key, D is the correct answer. I have difficulty to understand because if I exclude service prior to attaining age 18 under IRC section 411(a)(4)(A) then I will end up 2 employees by applying the 3 year cliff vesting for cash balance plan. Am I missing something hear? Please help.