Vesting Computation Period Change

My firm is taking over a calendar year Profit Sharing Plan where the current document indicates that the vesting computation period is Hours of Service (1000) commencing on the date the employee is hired and each anniversary thereof.  We are checking with the client and prior TPA to confirm that is how the vesting has actually been calculated for the participants, but are considering recommending changing the computation period to coincide with the plan year, rather than the employee's employment year.  If this change is made July 1, how does that affect the current participants?  Will we need to treat it similar to a short period of time and determine hours in 2021 based on their employment anniversary as well as based on the calendar year 2021 and possibly credit them with 2 years of vesting service?  Are there other pitfalls to consider with such a change?

To be honest, I am not sure. I have never encountered this situation.

However, the way I would approach it would be more like a change in vesting schedule. As long as nobody's vesting percentage is reduced by the change, then it should be fine. I would measure those vesting percentages both on the effective date and on the last day of the year. In other words, if somebody would have gained an additional year of vesting service during 2021, but wouldn't under the amendment, then I would make sure to grant them that additional year anyway.

I think this would be similar to changing a plan year, and my somewhat vague recollection is that you would look at the two 12 month periods - the one ending within the plan year on the old method, and the one ending on the last day of the year on the new method, and credit accordingly - which I think is exactly what you are suggesting.