Multiple employer plan

[AKconsult]

I am seeing conflicting information on whether the various employers in a multiple employer plan can have different age/service conditions and different vesting schedules. I realize that all service must be counted for all employers for these purposes, but is it permissible for each adopting employer to use a different eligibility or vesting provision than the sponsoring employer?

[PensionPro]

My understanding is the eligibility provisions and vesting schedules can be on an employer basis. What is the basis of the argument to the contrary?

[Guest SuzanneW]

Internal Revenue Code section 413©(3) says:

"(3) Vesting. Section 411 shall be applied as if all employers who maintain the plan constituted a single employer, except that the application of any rules with respect to breaks in service shall be made under regulations prescribed by the Secretary of Labor."

Treas. Reg. 1.413-2(d) says:

"(d) Vesting. Section 411 and the regulations thereunder shall be applied as if all employers who maintain the plan constituted a single employer. The application of any rules with respect to breaks in service under section 411 shall be made under regulations prescribed by the Secretary of Labor. Thus, for example, all the hours which an employee worked for each employer maintaining the plan would be aggregated in computing the employee's hours of service under the plan. See also 29 CFR Part 2530 (Department of Labor regulations relating to minimum standards for employee pension benefit plans)."

[PensionPro]

Trying to understand the train of thought here ...

Sec. 411 pertains to minimum vesting standards. What precludes the various sponsoring employers of a multiple employer plan from adopting different vesting schedules that meet the minimum standards?