Non-ERISA Vesting

[oldman]

We have a Tribal Government establishing a 403(b) program to employees of their public community college. The plan will have a matching contribution subject to a 4 year graded vesting schedule. However, they wish to grant 100% immediate vesting to employees who had participated in their 401(k) plan. I understand that vesting is based on pre-ERISA rules, but I am not sure this provision is "kosher". Any thoughts?

[mbozek]

We have a Tribal Government establishing a 403(b) program to employees of their public community college. The plan will have a matching contribution subject to a 4 year graded vesting schedule. However, they wish to grant 100% immediate vesting to employees who had participated in their 401(k) plan. I understand that vesting is based on pre-ERISA rules, but I am not sure this provision is "kosher". Any thoughts?

Governmental plans are exempt from non discrimination rules of 403b. Under IRC 414d plans of indian tribal governments are considered to be governmental plans for those employees performing essential governmental functions which are not in the performance of commercial activities.