change vesting

[Guest Moira]

I have a plan that is written to have a special vesting provision. It's a school (tribal) and the document indicates that anyone who loses their job due to a loss of funding for their program will accelerate to 100% vesting, assuming they are currently not 100% vested. The plan has a 3-year cliff vesting schedule. The employer is talking about eliminating this special vesting provision (eliminate the immediate 100% vesting due to program loss of funding). They have never encountered this situation where the vesting accelerates and an employee is terminated, so I don't believe we're actually changing the vesting to any participant's detriment. However, we also don't know if over the next 2 years or so some program might lose funding and an employee (perhaps newly hired?) might have been eligible for that accelerated vesting. Thoughts? Thank you.

[SteveH]

If you chagned from 3/100 to 2/20 don't you typically allow the participants the choice of which vesting schedule they want to have? So why not just do the same thing? Then phase out the accelerated vesting over the next couple years. The "old" schedule will only affect participants hired prior to xx/xx/xxxx.

[Guest Moira]

I suppose it could be done that way, and I did think of that, but I was wondering if that was necessary?

[austin3515]

Your plan document should have provisions about changing vesting--you can't just eliminate, is my recollection.

[Tom Poje]

ok, so a vesting schedule change has to be offered to people who have 3 years of service.

but those people are already 100% vested. so it probably becomes a moot point in this particular case.

[PMC]

WTF