Accelerated Vesting due to EGTRRA

[Guest Sara H]

I am confused about the accelerated vesting schedules due to EGTRRA. If a plan currently has a 5-year graded vesting schedule do they have to amend it to a 6-year graded schedule or can they continue with the 5-year schedule because it provides for faster vesting? (I realize that the employer also could amend to the 3-year cliff to make the employees even better off if they would choose).

[Archimage]

A 5 year graded schedule is fine. It only has to be at least a 6 year graded schedule. That is only for matching contributions. You can still do a 7 year graded for profit sharing contributions.