Amending vesting computation method

[Guest Epictetus]

A plan that currently credits vesting on the basis of 1,000 hours in a plan year (the calendar year) is contemplating an amendment to the elapsed-time method. According to 1.410(a)-7(f)(f), as explicated by the ERISA Outline Book, each employee's vesting service during the computation period in which the transfer takes place is the greater of (a) the period of service under the elapsed-time method from the first day of the computation period through the day of the change, or (b) the service under the computation periods method for that computation period which includes the date of the change.

Is the "computation period" the plan year? I do not see how anyone could be credited with vesting service under the elapsed-time method for a partial plan year (January 1 through August 1, the proposed amendment effective date). The hours method would have to prevail for the year in which the amendment takes place. Elapsed-time could only apply to vesting after the amendment year.

I'm convinced I am missing something, somewhere, though.

[Guest taxesquire]

The computation is the plan year 99% of the time, but it should be specified in the plan document. I think (but am not sure) that the next most common would be the participant's anniversary date for plan enrollement.

For the year of the amendment, anyone terminating employment during the year will need to provide 1,000 hrs of service. All employees who provide 12 mos of service will get credit for the year, regardless of the # of hours they provide.