Form 5623 - Minimum Vesting Standards Defined Contribution Plans Page 2
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4Plan Reference
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No
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n. Are years of service with other members of a controlled group of corporations,
or with trades or businesses under common control or with other organizations
that comprise an affiliated service group counted for vesting purposes? [0215]
o. When the employer maintains the plan of a predecessor employer, does the
plan provide that service with the predecessor employer is counted as service
with the employer? [0216]
p. Is service of individuals who are leased employees of any controlled group
or affiliated service group counted? [0217]
II. Vesting on Separation from Service-Return to Service Without Break in Service
Note-in a plan that uses the elapsed time method of determining service for vesting
purposes, a break in service is a 1-year period of severance.
a. Does an employee continue to vest, starting at the point in the vesting
schedule where the employee left employment, in both the pre-separation and
post-separation account balances? [0221]
b. If any part of the employee's account balance may be forfeited before the
participant incurs five consecutive one year breaks in service, does the forfeiture
occur as the result of a distribution on termination with opportunity for restoration
as required by regulations? [0290]
Ill. Vesting on Return to Service After a Break in Service
If a participant separates from service, has a 1-year break in service and returns
to service, does the plan provide after such participant has one year of service
after returning to service the following:
a. If such participant does not have five consecutive breaks in service, both
the pre-break and post-break service will count in vesting both the pre-break
and post-break account balances? [0231]
b. If such participant has five or more consecutive breaks in service, both the
pre-break and post-break service will count in vesting the post-break account
balances if either (1) such participant has any nonforfeitable interest in the accrued
benefit attributable to employer contributions at the time of such separation from
service or (2) upon returning to service the number of consecutive breaks in
service is less than the number of years of service. [0232 and 0233]
IV. Contributory Plans-Complete Only if Plan Permits Employee Contributions
(Voluntary or Mandatory)
a. Does the plan identify what part of an account balance is attributable to
employer and employee contributions under Code section 411(c)(2)? [0241]
b. Are all account balances resulting from employee contributions fully vested? [0242]
c. Does vesting in accordance with statutory minimums apply separately to
benefits that resulted from employer contributions? [0243]
d. Is a forfeiture because of withdrawal of employee contributions precluded
when the employee is at least 50 percent vested in the account balances that
resulted from employer contributions? [0244]
e. If a plan permits a forfeiture on withdrawal of mandatory employee
contributions when an employee is less than 50 percent vested in employer
contributions, does the plan provide for restoration of forfeited amounts on
repayment of withdrawn employee contributions? [0245]
Form 5623 (Rev. 1-2006) (page 2) Cat. No. 42698K
Department of the Treasury-Internal Revenue Service
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