Elapsed Time Vesting Question

[TBob]

The Background...

I have a 401(k) plan that uses a standard 6year vesting schedule for the employer contributions. Service is credited based on "elapsed time" rather than actual hours worked using the employment anniversary for the measurement period. The plan was established effective 1/1/2000. The plan excludes service prior to the plan establishment.

The problem/question...

A participant was hired in September of 1997 and terminated in July of 2005. I want to be certain that the vesting is correct before we process a distribution and the elapsed time thing is confusing me. My thoughts are that this participant's service begins to count as of 1/1/2000 so her vesting computation year is essentially the plan year and we need to ignore the employment anniversary. She is credited with a year of service for 2000, 2001, 2002, 2003, and 2004 but not for 2005 and is, therefore, 80% vested.

1. Am I correct that her vesting measurement period is the plan year?

2. Am I correct that she does not get credit for 2005 since she did not work the full 12 months?

3. Am I correc that she should be 80% vested?

Thanks in advance!

[Tom Poje]

assuming plan has a 2/20 vesting schedule, and further assuming employee has not reached normal retirement, your statements sound correct.

I suppose if plan says early retirement = 100% vested and ee hits that, or other things like that, ee could be 100% vested. but otherwise 80% sounds correct

[david rigby]

Any other plans?