I am looking for someone to confirm that with the new vesting schedule maximums (3 year cliff & 2-6 graded) for all contribution types (elective and non-elective) that this effectively voided the accelerated vesting schedule for those qualified plans that are Top Heavy.
I have searched the internet and been unable to find anything speaking to this issue and as stated above, I am looking for someone to confirm that I am either understanding the PPA correctly or am I missing some piece of PPA that also spoke to a new accelerated vesting schedule for top heavy plans.
Thank you
Full Version: Top Heavy Testing
PPA '06 requires all plans have vesting schedules as fast as what had previously been required of just top-heavy plans. Top heavy or not, a plan cannot now have cliff vesting that requires more than three vesting years, not 20% graded vesting slower than over two-six vesting years.
This is required of benefits that accrue for plan years that begin after 2006. So if a plan wants, it can retain its slower vesting for benefits that accrued in earlier years, but then that would require separate accounting.
I hope this helps.
This is required of benefits that accrue for plan years that begin after 2006. So if a plan wants, it can retain its slower vesting for benefits that accrued in earlier years, but then that would require separate accounting.
I hope this helps.
QUOTE (J Simmons @ Feb 8 2007, 11:04 PM) 
PPA '06 requires all plans have vesting schedules as fast as what had previously been required of just top-heavy plans. Top heavy or not, a plan cannot now have cliff vesting that requires more than three vesting years, not 20% graded vesting slower than over two-six vesting years.
This is required of benefits that accrue for plan years that begin after 2006. So if a plan wants, it can retain its slower vesting for benefits that accrued in earlier years, but then that would require separate accounting.
I hope this helps.
This is required of benefits that accrue for plan years that begin after 2006. So if a plan wants, it can retain its slower vesting for benefits that accrued in earlier years, but then that would require separate accounting.
I hope this helps.
So let me confirm that you would also agree that pursuant to the statement you made (which I agree with) then the only "real consequenes" of a plan going Top Heavy, for plan years after 2006, is the mandatory contribution minimums (DB:2% and DC:3%)?
Thank you
Correct
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