Change in Vesting Schedule

[chris]

E/er has been incorporated 2 1/2 years. Employer blew safe harbor 401(k) (to be effective 1/1/01) b/c broker didn't get adoption agreement executed. E/er gave safe harbor notice prior to end of 2000. Alternative in mind is PSP with 100% vesting and fund at 3% of compensation. Get safe harbor 401(k) in place as of 1/1/02. Effective 1/1/02 amend vesting schedule of PSP to 6 year graded vesting. Issue is whether Reg. §1.411(a)-8T(B)(3) allows all employees who have been there since day 1 to elect to stay under the old 100% vested schedule? Does the Reg. actually mean what it says? Any help appreciated. Thanks