Question

13.

Which of the following statements concerning the vesting of benefits or account balances of qualified retirement plans is correct?

		Upon termination of a defined-benefit plan, an employee who is not fully vested on the date of termination will forfeit part of his or her accrued benefit.
		Both employer and employee contributions are subject to the same vesting schedules.
		If a plan’s vesting schedule is modified by an amendment, an employee with at least 3 years of service may elect to have his or her vesting percentage computed under the old vesting schedule.
		Five-year cliff vesting is an acceptable vesting schedule for a top-heavy plan.

Answer 1

Ans:

If a plan’s vesting schedule is modified by an amendment, an employee with at least 3 years of service may elect to have his or her vesting percentage computed under the old vesting schedule

Reason - Those who have worked for at least 3 years may elect vesting percentage as per old schedule so that they are not under disadvantage due to changes or amendments