Safe-harbor 401k plan distribution

[Guest Laura Browne]

A profit sharing plan was restated as a safe-harbor 401k plan 1/1/04. Participant terminated 3/04. She never received or was entitled to any other contributions or made any deferrals after 12/31/03. The restated 401k safe-harbor plan is not subject to a vesting schedule and the old PSP has a 7-year graduated vesting schedule. Is she subject to the vesting schedule or because the plan was restated, there is no vesting schedule that needs to be applied?

[Earl]

I think there is a rule I couldn't find in 2 mins that says you need an hour of service under the new vesting to get the new vesting.

But if your new document has full vesting on all money types, what would it say to do with forfs?

[chris]

Just curious... I'm assuming the safe harbor 401(k) was added to the PSP, so the PSP is still in place, ie, there could be deferrals, safe harbor 401(k) contribution, as well as the PSP contribution, if any, made to the plan during a given year....??? Also, what are the eligibility rules for the safe harbor 401(K), eg, everyone employed on 1/1/04 is eligible or everyone must wait until they're 21 and have 1 year of service? I would think the PSP portion of the plan is still subject to the 7 year vesting schedule. I would also assume that if the safe ahrbor 401(k) allows for immediate eligibility on 1/1/04, then she'd be entitled to 3% of compensation (assuming 3% nonelective contribution is safe harbor contribution) from 1/1/04 thru 3/??/04. If there's an age 21 and 1 year wait for the safe harbor 401(k), then she'd not be eligible for the safe harbor contribution whatever it is.... Need more info.