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A retirement plan, Calendar Year Plan Year with 2/20 Vesting,  defines its "Normal Retirement Age" as the later of age 65 and 5 Years of Plan Participation, and, hired the following Eligible Employee:

Hire 3/1/2020

Birth 4/1/1957 (age 62, 11 mos at hire)

Eligible 6/1/2020

NRA based on the above definition is 1/1/2025 (1st day of plan year of 5th anniversary of participation)

Assuming works 1000+ hours in every year and is actively employed:

Q 1: this employee would not be 100% vested on his 65th birthday (4/1/2022) because he has not yet satisfied the definition of Normal Retirement Age, correct?

Q 2: on 12/31/2024 this employee is 80% vested; on 1/1/2025, this employee's vesting would be accelerated to 100% Vesting upon reaching Normal Retirement Age, correct?

 

Thank you!

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