Exclusion of prior service for Vesting for one of the combo plans

[MLML]

Hello,

When you set up two new plans (401k 001 and cash balance 002) with the same effective date (1/1/2016), is it possible to exclude prior services for the vesting purpose for one plan (CB) and not the other (401k)?

Cash Balance will exclude services prior to the effective date of the plan.

401k plan will consider all services including prior to the effective date of the plan.

Thanks.

[John Feldt ERPA CPC QPA]

Yes, as long as you don't violate the predecessor plan requirements. Sometimes you won't know that you violated this rule until one of the plan terminates, so there are some provider prefer not to set up the plans this way.