I work with a 403(b) plan sponsor that will be terminating its plan. Can you confirm that affected participantsthose who would be immediately vestedonly includes non-vested participants that have not taken their full account value and have not had a 5-year break-in-service? In other words, if a non-vested participant took a distribution one year before the plan termination, that person would not be affected?
Stacey Bradford, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer:
Correct, non-vested employees who took distributions prior to the plan termination date would not be affected. Per the IRS webpage on 401(k) plan terminations (the rules are the same for 403(b) plans with regard to this particular issue):
100% vesting
All affected participants become fully vested in their account balances on the date of the full or partial plan termination, regardless of the plans vesting schedule.
Full termination Affected participants are current or former employees who havent received full payment of their vested interest by the plan termination date, unless theyve incurred at least 5 consecutive 1-year breaks in service.
Thus, if the participant in question took a full distribution of his vested amount one-year prior to the plan termination date, that person would not need to be fully vested in amounts that were not vested as of the date of that prior distribution because it occurred prior to the plan termination date.
Note that this response only addresses vesting upon plan termination; see our prior Ask the Experts column on this issue of whether such full and immediate vesting can occur on the date there is a complete discontinuance of contributions to a 403(b) plan.
NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
Tags
Reported by
Reprints
Go here to see the original:
Who Is Immediately Vested Upon Plan Termination? - PLANSPONSOR
- If Brevity is the Soul of Wit ... - November 7th, 2009 [November 7th, 2009]
- Gang Brutality Caught on Tape - November 8th, 2009 [November 8th, 2009]
- Kim Jong Tweet - November 8th, 2009 [November 8th, 2009]
- Fuck Marching - November 8th, 2009 [November 8th, 2009]
- Monopoly Money - November 8th, 2009 [November 8th, 2009]
- Mexican Gang War: Both Sides are Cops - November 8th, 2009 [November 8th, 2009]
- The Fruits of Democracy - November 8th, 2009 [November 8th, 2009]
- MSM Pwned by Amateurs - November 8th, 2009 [November 8th, 2009]
- War on Drugs: Collateral Damage - November 8th, 2009 [November 8th, 2009]
- Goldman Sachs: Ruler of the Universe - November 8th, 2009 [November 8th, 2009]
- Sam Dodson Talks to MotorHome Diaries - November 8th, 2009 [November 8th, 2009]
- When God and Government Mix - November 8th, 2009 [November 8th, 2009]
- Mike Gogulski PWNS Social Security - November 8th, 2009 [November 8th, 2009]
- Stefan Molyneux Interviews Jan Helfeld - November 8th, 2009 [November 8th, 2009]
- Commander in Chief: Council on Foreign Relations - November 8th, 2009 [November 8th, 2009]
- Canadian Healthcare Extravaganza - November 8th, 2009 [November 8th, 2009]
- My Reply to an Essay on China, the US, and Yu Wan Mei - November 8th, 2009 [November 8th, 2009]
- Iraq War: A Biblical Event - November 8th, 2009 [November 8th, 2009]
- Crazy Facts from GovernmentLand - November 8th, 2009 [November 8th, 2009]
- Remember 9-11 - November 8th, 2009 [November 8th, 2009]
- Then Again... - November 8th, 2009 [November 8th, 2009]
- Hillary Clinton Devestates Pakistan - November 8th, 2009 [November 8th, 2009]
- Jan Helfeld and Elliot Engel - November 8th, 2009 [November 8th, 2009]
- Report on attacks against Michael Jude Gogulski 5 September 2009 - November 8th, 2009 [November 8th, 2009]
- They Are Selling You - November 8th, 2009 [November 8th, 2009]
- Happy Guy Fawkes Day - November 8th, 2009 [November 8th, 2009]
- Emergency Aid to Seniors? No Way - November 8th, 2009 [November 8th, 2009]
- The Public Option is the Decoy - November 8th, 2009 [November 8th, 2009]
- Should Insider Trading be Illegal? - November 8th, 2009 [November 8th, 2009]
- Reefer Non-Madness - November 8th, 2009 [November 8th, 2009]
- U.S. Legalizes Medical Marijuana - November 8th, 2009 [November 8th, 2009]
- Fiddling While Rome Burns - November 8th, 2009 [November 8th, 2009]
- Massachusetts Should Lower, Not Raise, the Dropout Age - November 8th, 2009 [November 8th, 2009]
- No Limits on Executive Compensation - November 8th, 2009 [November 8th, 2009]
- Execs Quit to Avoid Pay Limits - November 8th, 2009 [November 8th, 2009]
- Krugman on China and the Dollar - November 8th, 2009 [November 8th, 2009]
- Obama's Climate Speech at MIT - November 8th, 2009 [November 8th, 2009]
- The Fed and Policy Uncertainty - November 8th, 2009 [November 8th, 2009]
- Civil Union versus Civil Marriage - November 8th, 2009 [November 8th, 2009]
- Medicare Shuns Seniors - November 8th, 2009 [November 8th, 2009]
- Financial Market Reform - November 8th, 2009 [November 8th, 2009]
- All You Need to Know ... - November 8th, 2009 [November 8th, 2009]
- No Government Health Insurance - November 8th, 2009 [November 8th, 2009]
- Cap and Trade Will not Reduce Emissions - November 8th, 2009 [November 8th, 2009]
- Cartoon Commentary - November 8th, 2009 [November 8th, 2009]
- Did the Stimulus Work? - November 8th, 2009 [November 8th, 2009]
- Letting the Sick Die on the Street - November 8th, 2009 [November 8th, 2009]
- Renewed Hope for Gridlock? - November 8th, 2009 [November 8th, 2009]
- An Opportunity for Libertarians? - November 8th, 2009 [November 8th, 2009]
- Not-so-Temporary Stimulus - November 8th, 2009 [November 8th, 2009]
- Sausages in Financial Reform - December 12th, 2009 [December 12th, 2009]
- Dumb Cops, Dumb Laws, Unnecessary Victims - December 13th, 2009 [December 13th, 2009]
- Fighting Terrorism in Berkeley - December 13th, 2009 [December 13th, 2009]
- Obama's Home Teleprompter Malfunctions During Family Dinner - December 13th, 2009 [December 13th, 2009]
- School Lunch FAIL - December 13th, 2009 [December 13th, 2009]
- Insane Mortgage Policy - December 13th, 2009 [December 13th, 2009]
- Comments Welcome - December 13th, 2009 [December 13th, 2009]
- Obamanomics: Growing the Pie or Dividing the Pie? - December 13th, 2009 [December 13th, 2009]
- Right Meets Left on Criminal Justice - December 13th, 2009 [December 13th, 2009]
- Is Nuclear the Answer to Global Warming? - December 13th, 2009 [December 13th, 2009]
- Franksgiving: Another Flawed Stimulus - December 13th, 2009 [December 13th, 2009]
- Dollars for Dishwashers - December 13th, 2009 [December 13th, 2009]
- The Politics of Cap and Trade - December 13th, 2009 [December 13th, 2009]
- A College for Cannabis - December 13th, 2009 [December 13th, 2009]
- George Will, Medical Marijuana, and Legalization - December 13th, 2009 [December 13th, 2009]
- Bernanke on the Fed - December 13th, 2009 [December 13th, 2009]
- A Debate About Mexico's Drug Wars - December 13th, 2009 [December 13th, 2009]
- Doublespeak - December 13th, 2009 [December 13th, 2009]
- Tobacco Prohibition, Bit by Bit - December 13th, 2009 [December 13th, 2009]
- The U.S. in the Middle East: A Prediction - December 13th, 2009 [December 13th, 2009]
- Gay Marriage or Civil Union: Would Less be More? - December 13th, 2009 [December 13th, 2009]
- Whither the Estate Tax - December 13th, 2009 [December 13th, 2009]
- Late-Term Abortions in Nebraska - December 13th, 2009 [December 13th, 2009]
- Why Climate Negotations Are a Waste of Time - December 13th, 2009 [December 13th, 2009]
- "Mild" Gun Control Laws - December 13th, 2009 [December 13th, 2009]
- Did the Iraq Surge Really Work? - December 13th, 2009 [December 13th, 2009]
- Driver's Ed at Age 52 - December 13th, 2009 [December 13th, 2009]
- Ginnie Mae, Ticking Time Bomb - December 13th, 2009 [December 13th, 2009]
- Toddler Terrorism - December 13th, 2009 [December 13th, 2009]
- Policy Insight from David Letterman - December 14th, 2009 [December 14th, 2009]