If a new 401(k) plan is being established where there was previously a SIMPLE plan, can vesting service prior to the effective date of the 401(k) plan be excluded or must service under the SIMPLE plan be counted?? Thanks.

Only a qualified plan can be a predecessor plan for this purpose, therefore is it a SIMPLE-IRA or a SIMPLE-401(k)? The former is not a qualified plan and therefore would not be a predecessor plan, but the latter is a qualified plan. Of course you also don't state how long ago the SIMPLE was maintained. If it was more than 5 years, then it definitely doesn't count as a predecessor plan.

(I found a spelling error and we can't have that now.)

Thanks. The SIMPLE will end this year and the 401k will start in 2005, but you answered my question. Knowing the IRA wasn't a qualified plan, i was a little unsure about the SIMPLE 401k. Thanks again.