Alex Daisy Posted April 8, 2009 Posted April 8, 2009 A 401(k) Plan currently has a 6 year graded vesting schedule for the Profit Sharing Contribution. The Plan Sponsor wants to amend the Plan to read "Employees hired prior to and including 12/31/06 are 100% vested in the Profit Sharing Plan". Is this allowed?
J Simmons Posted April 8, 2009 Posted April 8, 2009 A 401(k) Plan currently has a 6 year graded vesting schedule for the Profit Sharing Contribution.The Plan Sponsor wants to amend the Plan to read "Employees hired prior to and including 12/31/06 are 100% vested in the Profit Sharing Plan". Is this allowed? It's not a cutback, so no 411d6 problem. Will this amendment, given its timing, disproportionately favor HCEs? If so, then it could be discriminatory. 1.401a4-5. John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.
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