Enhanced benefits at termination

[Young Curmudgeon]

I have a plan that wants to add a provision that would add years of credit for benefit accrual, vesting and participation in the event of involuntary termination under certain circumstances.

The benefit could result in a person with two years participation, receiving a seven years participation benefit and instantly becoming vested.

The entire arrangement seems problematic.

I see issues with benefits rights and features discrmination and I think it may be impossible to get this to pass the 411(b)-1 accrued benefit requirements.

Even if we could pass a general test, is there a way around the 411(b)-1 issue?

[david rigby]

I agree that this will (probably) cause backloading problems.

I have seen this provision once before, but it was applied only to the vesting percent (eg, 100% vested if "laid off" with 3+ YOS), but don't know if it was ever a BRF concern.

[Young Curmudgeon]

I failed to mention that this enhancement would only apply to one department in the company.