jpod Posted December 17, 2014 Posted December 17, 2014 401(k) Plan provides for elective deferrals and employer match only. No profit sharing or other non-elective employer contributions are permitted. Vesting schedule is 20% after 1 YOS, 40% after 2, etc., with 100% after 5. As written the vesting schedule applies to all employer contributions, but as noted the document does not provide for anything other than a match. Employer wants to amend the plan to provide for a non-discretionary, non-elective contribution starting 2015. However, it wants to adopt a 2/6 vesting schedule for that money source, while preserving the 1/5 vesting schedule for the match. Will employees with at least 3 YOS have to be grandfathered into the more favorable 1/5 vesting schedule for the non-elective contribution due to IRC Section 411(a)(10)?
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