Question

Assume a qualified plan provides eligibility for all employees age 21 and older with 2 years of service. There are numerous key and highly compensated employees eligible for participation in this plan. What vesting schedule is required?

Answer 1

Answer:

100% vesting upon plan entry

Explanation:

Vesting is a term in retirement that means ownership. Meaning that every employee owns (vest) a certain percentage of the account in their plan for each year.

100% vesting means the employee owns Al of his account, the employer cannot forfeit or take it back for any reason.

A qualified plan providing eligibility for all employees age 21 and older with 2 years of service and highly compensated employees are eligible. This will require 100% vesting upon plan entry