Amend vesting

[Guest JPIngold]

I think I know the answer, but wondering what others do in this case.

I have a Corbel VS document with immediate vesting. The definition of "forfeiture" says: "Under this Plan, Participant accounts are 100% vested at all times."

So, for 2010, the only eligible employee is the owner. He has one employee who has worked part time since 2007, with 2010 being the first year in which he will work 1,000 hours, meaning he will meet the 1 YOS requirement and will enter on 1/1/2011.

If I amend the document now (before 1/1/2011) to go to a 6 year graded schedule, what impact does this have on his vesting. He does not have 3 years of vested service, so he does not have the option of using the old schedule.

The document, however, has language that says notwithstanding the new vesting schedule in the new document, "the Vesting percentage of a Participant's Account shall not be less than the Vested percentage attained as of the later of the effective date or the adoption date of this amendment and restatement".

Well, the employee doesn't have an account in 2010. If he did, it would be 100% vested, but since he doesn't, do we say he is "theoretically" 100% vested as of 12/31/10, so the amendment can not bring him back to being only 20% vested next year once he picks up his second year with 1,000 hours???

Any thoughts would be much appreciated.

Thanks.

James