change in vesting method

[Guest EDSAADE]

would a notice to participants be required if vesting method is changed from "computation period" to an "elapsed time" method?

[david rigby]

To what notice are you referring?

[Guest EDSAADE]

i'm referring to Section 204(h) Notice. Although there isn't a change in vesting schedule, the methodology does affect participants years of vesting service.

[Blinky the 3-eyed Fish]

I assume we are talking about a MP or TB plan, so the 204(h) rules apply.

That being said, I am not sure of the answer to your question. I have not seen anything that addresses whether or not a vesting schedule change can constitute a "significant reduction in the rate of benefit accrual". Personally, I think that it could and would provide the notice to those whose YOS are reduced and who don't have the right to remain on the old schedule.

[WDIK]

EDSAADE:

Are you referring to the requirement under 411(a)(10)(B) calling for certain participants to be allowed to elect to stay under the plan's old vesting schedule?

(Edit for grammer)

[david rigby]

ERISA 204(g) is analogous to IRC 411(d)(6). My read of 204(h) is that is unrelated to the vesting schedule. There are other issues to respect when the vesting schedule is changed under IRC 411(a)(10).

Notice is possible, but not required. See Reg. 1.411(a)-8T(b)(1).

http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html

[Brian Gallagher]

if this is a qualified plan, wouldn't an SMM need to be done?