Information to share on rule of parity application to employees

[Guest LMalone]

We received a response to an IRS General Information Letter Request confirming that the rule of parity applies to employees and not just participants. This has confused me for a long time and we reached a point where we had to know.

General information letters are free and may be requested at the following address:

Employee Plans Technical Branches, IRS, 1111 Constitution Avenue, N.W., Attn: T;EP; Room 6052, Washington, DC 20224. Turnaround time is 30-60 days.

We sent in a detailed request with examples, but if all you want to know is whether or not the rule of parity applies to employees or participants, just send in that simple question. The information letter does not apply to a specific set of facts but expands on information already out there that may be confusing.

Hope this is helpful to some of my fellow strugglers.

[Guest carsca]

Speaking of struggling, I'm wondering if you can help shed light on the following:

Can the Rule apply after a 5 year BIS, if the Participant was 0% vested in matching contributions, but

(1) 100% vested in 401(k) contributions; or

(2) 100% vested in Profit Sharing Contributions.

Thanks in advance!