John Feldt ERPA CPC QPA Posted February 8, 2011 Posted February 8, 2011 A plan sponsor is making a significant change to their business operations. Because of this, they want to change their plan's vesting schedule prospectively, to apply only to new hires starting on the frist day of their next plan year. The current vesting schedule is 100% immediate. 10 participants (2 HCEs), 5 year old plan. They want to change to 6-year graded. This would only affect new entrants. They are not planning to hire anyone that would become an HCE. Under 1.401(a)(4)-1(b)(4), the timing of amendments must not have the effect of discriminating significantly in favor of HCEs. My thought is that this change does not discriminate significantly in favor of the HCEs - agree / disagree? Or is this fall into 1.401(a)(4)-1(b)(3) instead?
david rigby Posted February 8, 2011 Posted February 8, 2011 Many prior (similar) examples. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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