7 Year Graded Vesting

[Alex Daisy]

I have a Plan Document that was Amended and Restated as of 1/1/2006.

The vesting on the ER Match and Profit Sharing Contribution was a 7 Year Graded Vesting Schedule.

When was the Plan required to go to a 6 year graded Vesting Schedule?

[Guest Sieve]

The 6-yr graded vesting schedule is effective for contributions to DC plans made for plan years beginning after 12/31/06. It will not appear in EGTRRA restatements, however, because it was a PPA '06 provision (& is not required to appear in plan documents, I believe, until 2010).

[J Simmons]

Larry,

Even though EGTRRA pre-approved plans allow a 3-7 graded vesting, are you preparing graded vesting plans that want the max with 2-6 year vesting on those EGTRRA plans since it is post-2006?

[Guest Sieve]

Corbel VS (called IDP), which I generally use, has a provision covering PPA '06 vesting (for those using 7-year graded under EGTRRA).

What are those using Corbel's prototype doing?

[BG5150]

Wasn't the vesting schedule for match changed back in 2002? And discretionary contributions after 12/31/06?

[K2retire]

The Corbel prototype only allows the 7 year graded or 5 year cliff vesting to apply to profit sharing contributions. We've chosen to only allow the 6 year graded or 3 year cliff to avoid having to deal with different vesting schedules for different money types ever since the requirement for match vesting changed.

[Kevin C]

Wasn't the vesting schedule for match changed back in 2002? And discretionary contributions after 12/31/06?

Yes, EGTRRA changed it for matching contributions and PPA changed it for other DC contributions.

While a PPA amendment is not required until the end of the 2009 plan year, you have to operate the plan as if that amendment was in effect. See PPA 1107.

I'm using a PPA compliant vesting schedule in the EGTRRA restatements.