Granting vesting

[30Rock]

Is there a problem granting 100% vesting when certain employees are hired and they previously worked at certain medical facilities and are now being hired by a certain employer, lets call it an anesthesilogy PA. If HCEs and NHCES of the group being hired are treated the same, there is no discriminatory treatment. But granting this group 100% vesting and immediate eligibility while new hires of the employer have to work 3 years for 100% vesting and one year to be eligible, creates BRF testing does it not?

I appreciate any insights, thanks!

[Jim Chad]

The way this is usually done is to recognize service with a certain previous employer. As long as this was available for everyone, I did not think it was a testing issue. But then I have been wrong before. What does everyone else think?

[K2retire]

I agree with Jim. But that may not produce the exact same result described in the original post. For example, someone who had only 2 YOS with the previous employer would not be 100% vested.

[30Rock]

Right, and if you lets say 6 years under a graded schedule, you are crediting more than the employee really worked. I think this requires BRF testing.

Also, is the 5 year rule a DC rule or DB rule. Maybe Mike Preston knows? What I mean is, how much prior service can you credit before you need to test - 5 years, or is this just for prior service in a defined benefit plan??

THANKS

[Guest Serena]

What happens if a group of employees are being terminated but it is less than 20% which would require full vesting. If you fully vest this group, this would require a plan amendment and BRF testing correct?

Please advise.

Thanks