Vesting

[justatester]

If a plan has different vesting schedules depending on DOH, is it subject to BRF Testing?

For example, if you are hired before 1/1/2013, you are 100% vested in your match. Anyone hired after 1/1/2013, you are subject to a 5 year graded schedule.

[Lou S.]

You can change vesting schedule but anyone with 3 years of service at the time of the change has the right to chose which vesting schedule they want to be on.

I suppose it is possible the IRS could rule the amendment discriminatory if all (or most) of the people hired before 1/1/13 are HCEs and most or all of the employees hired after 1/1/13 are NHCEs. This might happen in a small start-up that 100% immediate vesting and amends as soon as they decide to have non-owner employees.