12.31.01 plan is not top heavy for 2002.

Participant terms on 2/15/02. He is not paid by 12/31/02.

12.31.02 plan is top heavy for 2003.

Vesting Sched goes from 7-yr to 6-yr.

Does the terminated participant get a 1 year bump in vesting due to the new top heavy status?

thanks...

Check plan provisions carefully, but normally a participant's benefit and vesting will be determined by the plan terms in effect at the severance of employment. The obvious exception would be a plan amendment which has a retroactive effective date.

Treas Reg 1.416-1 question V-3
..."However, when a plan becomes top-heavy, the accrued benefits of any employee who does not have an hour of service after the plan becomes top-heavy are not required to be subject to the minimum vesting schedule..."

awesome... thanks for the help. couldn't find anything in my document in the Top Heavy section, but then the idea of amending the vesting schedule... and there it was, with specific reference to change due to top heavy.

Thanks.

Earl