Vesting question; you have to comply with PPA strictures on vesting even though the PPA restatement/amendment has not come due?

[Guest PivotTable]

Vesting question; you have to comply with PPA strictures on vesting even though the PPA restatement/amendment has not come due? So, one would have to vest on a six year schedule or faster, right? You have to comply with the PPA laws as of the effective date right. So, you would have to vest faster than a seven year schedule as early 2007.

[Guest Sieve]

For DC plans, Yes, or else 3-year cliff vesting. But, since you mention that PPA amendments for the plan are not yet due, I suspect you are dealing with a DB plan, and DB vesting remains at 3-7 graded vesting or 5-year cliff.

[david rigby]

... DB vesting remains at 3-7 graded vesting or 5-year cliff.

Except for cash balance/hybrid plans.

[My 2 cents]

Did PPA change vesting requirements for defined benefit plans that are not cash balance/hybrid plans?

My understanding of PPA-mandated changes in general is that one must administer the plan as though the amendment were already adopted, once you get to the mandated effective date, even if there is a delayed deadline for the compliance amendment. And, of course, make sure the amendment, when adopted, matches the choices made in setting administrative practice based on an expected amendment.

It is also my understanding that defined benefit plans would reach that deadline (in most instances) at the end of the plan year beginning in 2009, so it's too late to do it right for a calendar year plan if no interim amendment was adopted last year.

[Guest Sieve]

As stated earlier, PPA did NOT change minimum vesting schedules for straight DB plans--still 5-year cliff or 3-7 year vesting. (IRC Section 411(a)(2).)

[david rigby]

Did PPA change vesting requirements for defined benefit plans that are not cash balance/hybrid plans?

See IRC 411(a)(13) for the PPA-added vesting requirement for "hypothetical account balance plans".