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FICA Replacement Vesting


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We recently took over a FICA Replacement plan.  The plan has a 7% employee contribution and a 13% employer contribution.  The employer contribution account has a vesting schedule that begins at year 5 with 50% vesting.  I was under the impression that at least 7.5% had to be 100% vested.  Can you have a vesting schedule?

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100% immediate vesting is required only for part-time, seasonal, and temporary employees. Contrast 31.3121(b)(7)-2(d)(1)(ii) ("(other than vesting)") with 31.3121(b)(7)-2(d)(2)(i) (benefit must be "100% nonforfeitable" on any noncoverage day).

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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