Funding Target for Partially Vested Terminated Participant

[Pension RC]

The regs state that, "The benefits taken into account are based on the participant’s or beneficiary’s status (such as active employee, vested or partially vested terminated employee, or disabled participant) as of the valuation date, and those benefits are allocated to funding target or target normal cost." Am I correct in understanding that this means that, for a terminated participant who is partially vested, the funding target would be based only the vested benefit?

Thanks!

[david rigby]

Just my opinion. Once a participant terminates employment, the deferred vested benefit is fixed. For example $100 x 60% = $60.

After that, you care only about the $60 for all purposes (except in the case of a future rehire).

But, I could be wrong. It's happened before. Just ask my ex-wife.

[My 2 cents]

I don't think too many funding targets out there include recognition of the non-vested portions of partially vested terminated participants' accrued benefits.

A better question might be when is it necessary to restore the non-vested portion of a terminated participant's accrued benefit when the plan terminates.

If the participant had terminated 12 years ago and the plan terminates now, do you have to reconstruct the full accrued benefit and fully vest it?

If the participant had terminated 4 years ago? Eight months before the decision was made to terminate the plan? Two months?