65. Amendment of vesting schedule

Statement of Requirement: Code §I RC 411(a)(10), §I RC 411(d)(6); Reg. §T reas. Regs. 1.411(a)-8(c)(l), § 1.411(a)-8T, § 1.411(d)-3(a)(3); Rev. Proc. 2017-41, sec. 5.04 2023- 37, 9.02(2)

Document Provision: _____

Sample Plan Language:

If the plan’s vesting schedule is amended or the plan is amended in any way that directly or indirectly affects the computation of a participant’s nonforfeitable percentage, or if the plan is deemed amended by an automatic change to or from a top-heavy vesting schedule, in the case of an employee who is a participant as of the later of the date such amendment or change is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such employee’s employer-provided accrued benefit will not be less than the percentage computed under the plan without regard to such amendment or change. F urthermore, each participant with at least 3 years of service with the employer may elect within a reasonable period after the adoption of the amendment or change, to have his nonforfeitable percentage computed under the plan without regard to such amendment or change. For participants who do not have at least one hour of service in any plan year beginning after December 31, 1988, the preceding sentence shall be applied by substituting “5 years of service” for “3 years of service” where such language appears. The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of:

(1) 60 days after the amendment is adopted;

(2) 60 days after the amendment becomes effective; or

(3) 60 days after the participant is issued written notice of the amendment by the employer or plan administrator.

With respect to benefits accrued as of the later of the adoption or effective date of the amendment, the vested percentage of each participant will be the greater of the vested percentage under the old vesting schedule or the vested percentage under the new vesting schedule.