When do the provisions of a plan amendment changing eligibility and ve

[Guest D. Neuhauser]

If a plan amendment changes the eligibility and vesting from 2 years/100% to a 1 year, dual entry, 1000 hours/2-20 vesting effective 11/1/00, when do the amended provisions actually take place? In other words, if someone was hired 09/01/00, is that person following the eligilibity rules prior to 11/01 or after 11/01 or does it depend on when the amendment was signed? Or does it depend on another factor? Thanks so much.

[Larry M]

The answer to the question is determined by the language of the amendment.

It may say the changes apply only to those who were not employed, or participants as of its effective date. [This is common and avoids the headache of some participants having two vesting schedules for portions of their benefits.]

if the amendment applies to all employees, you have an administrative nightmare and, most likely, some unhappy employees who were about to become eligible (with 100% vesting).

[david rigby]

Assuming this plan is subject to ERISA, the"anti-cutback" provisions of IRC 411(d)(6) would apply to those who are participants as of the effective date of the amendment (or actual adoption date, if later). That is, there is no requirement that any special "grandfathering" apply to employees who have not yet become participants.