Accelerated PPA Vesting for DC Plans

[mming]

A profit sharing plan will maintain two vesting schedules - the old 5-year cliff schedule for pre-2007 contributions and a 2/20 schedule for PPA on contributions for years after 2006. For the 2007 year no contributions were made, however, a forfeiture was reallocated. Section 904©(1) of PPA says that the accelerated vesting requirement is effective for contributions made for plan years beginning after December 31, 2006 and doesn't specifically mention forfeitures. Also, the forfeitures that were reallocated in 2007 were derived from pre-PPA contributions. I'm not entirely sure whether the PPA vesting schedule should be applied but am leaning towards doing so, erring on the side of caution - interpreting sec. 904 to also apply to forfeitures no matter what year the contributions they came from were for. Is this the correct way to handle this situation? All help is greatly appreciated.

[Guest Sieve]

I just suggested on another post that forfeitures ought to be considered employer contributions for this purpose. If those forfeitures relating to pre-2007 contributions are subject to the "old" vesting schedule, will you then continue to track them as such in future years when they might be reallocated as forfeitures to others on down the line? I think not.

I tyhink you're on the right track. It just doesn't make any sense to me not to treat the forfeitures as employer contributions. But, inquiring minds may differ . . .

http://benefitslink.com/boards/index.php?s...st&p=169100

[mming]

Thanks for the input and the link. I wanted to avoid maintaining two schedules as much as possible, but in this case it makes about a $45K payout difference. Luckily it's a small plan.