Vesting Schedule Amendment

[Gary]

A plan was drafted with 100% immediate vesting.

They now want to amend the plan to be 100% 5 (or three) year cliff vesting.

For employees with less than threee years of service (i.e. not eligible for the election of old schedule) would this be allowed? Or does it fall under the 411d6 rules?

My interpretation is that it would be a 411d6 violation, but curious if anyone knows of any exceptions.

It is a plan with five participants who all qualify as 5% owners, so all key EEs and HCEs.

One employee is over 70 at hire. The employee has 1 year of service, participation.

Obviously the goal here is to enable employee to defer receiving an RMD.

[SoCalActuary]

No.

also, no sympathy.

The plan can be changed for any future participant, but nothing is taken away for any existing ones.

The RMD issues should have been discussed before the person became eligible. Paying taxes

is a burden that could have been delayed only until 3 years of service in any event, since this is

clearly a top-heavy plan. But with good consulting, the taxable amount could be less than 4% of

the benefit accrued.