Vesting Changes Under EGTRRA

[Guest yerisa]

What if an employer's change to accelerated graded vesting schedule under section 633 of EGTRRA (from existing 5 year cliff) will actually result in reduced benefits for some employees? Must or can they be "grandfathered" under old schedule until fully vested? Alternatively, is the employer required to adopt an EGTRRA-mandated schedule that is at least as favorable as existing one?

[Hoard1]

My understanding is that Participant with at least 3 years of service must be given an election as to which vesting schedule they wish to be under. For example 5 yr cliff that changes to 6 year graded. I am certain this is something we will get guiadance on soon

[Guest Tom Geer]

Right. You also have to make sure nobody actually goes down in vested percentage. Ordinary practice is to give everyone the better of the two.