Plan Termination - vesting

[Lou81]

Good Morning.  

I have a plan that will be terminating. 

Say they terminate in 7/1/2022.  All participants would become fully vested.

What about any participants that were paid out in the 1st 6 months of 2022?  Would i need to go back and fully vest them and do a secondary distribution?  Or should i fully vest them now knowing the plan will be terminating?

Try to avoid any issues. 

Appreciate your input!

[ratherbereading]

No, you wouldn't go back and fully vest them. I wouldn't fully vest anyone until the amendment to terminate the plan is signed. They could change their mind. Hope that helps. 

[CuseFan]

If plan document says forfeit non-vested balance at the earlier of distribution of vested balance or 5 consecutive one-year breaks in service (typical), then anyone not fully vested that is paid out before the plan termination date should forfeit their non-vested balance. 

[Dave Baker]

Regarding the participants becoming entitled to distributions during the first six months of 2012 -- are these employees whose employment is terminating due to layoff or firing (not because they're quitting)?

[Lou81]

 

1 hour ago, Dave Baker said:

Regarding the participants becoming entitled to distributions during the first six months of 2012 -- are these employees whose employment is terminating due to layoff or firing (not because they're quitting)?

no, they all voluntarily left.