jkharvey Posted August 30, 2010 Posted August 30, 2010 A controlled group is going to become adopting employers of a MEP. Can each member of the controlled group provide a different vesting schedule? I know about testing for nondiscrimination in the aggregate for the controlled group, but is vesting a BRF to be tested or some other prohibition for the different vesting schedules?
Guest Sieve Posted August 30, 2010 Posted August 30, 2010 Look at Treas. Reg. Section 1.401(a)(4)-11©. I think it means that IRC Section 411 vesting schedules are treated as equivalent for non-discrimination purposes.
jkharvey Posted August 30, 2010 Author Posted August 30, 2010 Look at Treas. Reg. Section 1.401(a)(4)-11©. I think it means that IRC Section 411 vesting schedules are treated as equivalent for non-discrimination purposes. So, each member of the controlled group can use any of the statutory vesting schedules and be "deemed" nondiscriminatory? Is that a correct interpretation?
Guest Sieve Posted August 30, 2010 Posted August 30, 2010 I was afraid you'd ask that. Clearly, if there are separate plans which pass 410(b), the answer would be Yes. If the plans must be combined to pass 410(b), then I think the answer is still Yes. It looks like the cited reg supports that conclusion, but I'm not absolutely certain. Does anyone else agree--or disagree? What does Tripodi say?
Archimage Posted August 30, 2010 Posted August 30, 2010 If it is a controlled group of companies then how are you considering it a multiple employer plan? Assuming it is not a multiple employer plan, the answer to your question is yes but you will have to do BRF testing.
jkharvey Posted August 31, 2010 Author Posted August 31, 2010 If it is a controlled group of companies then how are you considering it a multiple employer plan? Assuming it is not a multiple employer plan, the answer to your question is yes but you will have to do BRF testing. They are a controlled group but going to adopt another plan. That plan is a MEP. I'm really confused now. Is vesting subject to BRF or not? In reading the regulation referred to above, it sounds like vesting is not subject to BRF testing. Thank you.
Tom Poje Posted August 31, 2010 Posted August 31, 2010 as Sieve indicated, the regs are clear that if one group has a 2/20 schedule and the other group has 3 year cliff, that those schedules are 'deemed' to be equivalent. once you have more than 2 schedules (or 2 schedules that are not deemed equal), then you would test the same as you would for any BRF. ...................... I imagine the following factors are worth considering: how is vesting credited - does one plan exclude years before the plan started and another include them? how is vesting credited - is one plan 1000 hours and another 500 hours? I suppose there are other possibilities as well.
Archimage Posted August 31, 2010 Posted August 31, 2010 I see what you are asking now. I agree with Tom if you are using those types of schedules.
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