Vesting

[CLE401kGuy]

The client has hired a PT bookkeeper who will work only 650 or so hours each calendar year. To vest, 1000 hours is needed each calendar year. The 401k plan has a 6 yr graded vesting schedule (there is also a CB plan with a 3 year cliff). In order to help this participant vest are either of the two following options OK to use and which would you prefer..

1) Fully vest the participant right out the gate - make her 100% vested outright (obvious downside, the participant leaves in under 6 or 3 years with contributions she would not have been vested in

2) For this participant only define a year of service as 500 hours for vesting purpose - while perhaps a challenge to keep track of, it would still require 6 or 3 years for full vesting on contributions to the plans -

The participant is an NHCE and always will be an NHCE - My main question is can I choose to define a year of service for vesting for an NHCE differently than all other participants in the plan.

[Guest Offender]

Don't see why not as it is for an NHCE. I would think however, that it is more appropriate to tie the document provision to the position, rather than the name.