Is it permissable to have different vesting schedules dependant on an

[R. Butler]

We've got a takeover Plan that uses one vesting schedule for employees hired before 01/01/00 (6 year grade) and another vesting schedule for employees hired after 01/01/00 (4 year grade). Is this permissable? I've never seen something like that before.

[Guest F1fan]

Such an arrangement is permissible. Our corporate plan used different schedules for people depending on hire date. It does make for more difficult administration, however. That is one reason we no longer use two schedules.

[Guest LKHartnett]

What a bummer for the longer-term employees!

I don't understand why newer employees would get the benefit of a better vesting schedule over potentially longer-term employees . . .

Wonder if someone hired before 2000 can quit and come back. At least any new contributions would vest at under a more rapid schedule, even if the older accounts vest under the pre-2000 schedule.

[mbozek]

While the plan may use different vesting schedules for different groups of employees, the manner in which the employees vest in their accrued benefits must not discriminate in favor of the HCEs. Reg. 1.401(a)(4)-11©.