401(a)(26)-meaningful benefits

[Guest lerieleech]

We have a DB plan established in 2005. It is crosstested with a DC plan, so it was set up so that enough employees participated to satisfy 401(a)(26).

In 2006, a few of the DB participants terminated. The two I will refer to here worked the necessary 1000 hours to receive a 2006 accrual, but are 40 and 60 percent vested respectively.

The plan was set up to basically give them enough benefits to be considered meaningful accoding to the IRS field memo issues by Paul Schultz. Basically, it gives them 0.5% of pay accruals.

My question is whether the two terminated participants referred to are receiving meaningful benefits in 2006. (We're going to have to bring in at least one new person anyway, because another guy terminated and the participant count is up. It just comes down to how many we need.)

[SoCalActuary]

The two participants worked 1000 hours, and received an accrual of benefits at least 0.5%.

Sounds OK to me. I'd count them.

The vesting of benefits is not directly part of this compliance issue, and makes it look confusing,

since the participants end up with a higher accrued benefit but only part vested. Ignore this.