Definition of "affected employee" in a partial plan terminat

[Guest Tim K]

Our group of companies has one combined 401(k) plan. During 2001 our parent company sold one division and closed down a second resulting in a partial plan termination. These people were subsequently fully vested on termination. In addition we had one person let go and two laid off from other divisions unrelated to the above plant closures. Do we need to vest the three people who terminated but had no connections to the plant closures. Are they "affected employees"? Thanks for the advice.

[rcline46]

Two items - recent court case said 'affected' participants were those who were NOT 100% vested.

Then - affected participants would ONLY be those from the plant closing. Even if from that plan, employees who were fired for cause or quit for reasons other than closing are NOT affected participants.

Note - participants, not employees. If not in the plan, they are not counted. Of course if you went and 100% vested all employees at the one plant, good for you. However, you may not have had an actual partial termination.

[alanm]

Try looking at the court case Borda Versus Hardy, decided

March 5, 1998 in federal circuit court docket 95-75493. the Judge

was James Carr.