| Vesting Examples
|
Example 1:
Sally earned 2 Qualified Years and $2,400 total in contributions in 1988 and
1989. Since she did not work in the next five years (1990-1994), she had a Permanent
Break in Service on December 31, 1994.
From 1995 through 1999, Sally earned 5 more Qualified
Years and $6,000 in contributions. Sally is vested in 1999 and her benefit
will be based on the $6,000 in contributions that were earned after her Permanent
Break in Service. The earlier $2,400 remains forfeited.
Table-Example 1:
|
Year
|
Earnings
|
Contributions
|
Vesting Status/Breaks
|
|
1988
|
$20,000
|
$1,200
|
|
|
1989
|
$20,000
|
$1,200
|
|
|
1990
|
$0
|
$0
|
Break
|
|
1991
|
$0
|
$0
|
Break
|
|
1992
|
$0
|
$0
|
Break
|
|
1993
|
$0
|
$0
|
Break
|
|
1994
|
$0
|
$0
|
|
|
1995
|
$20,000
|
$1,200
|
|
|
1996
|
$20,000
|
$1,200
|
|
|
1997
|
$20,000
|
$1,200
|
|
|
1998
|
$20,000
|
$1,200
|
|
|
1999
|
$20,000
|
$1,200
|
Vested
|
Example 2:
Dean earned 3 Qualified Years and $2,700 total in contributions
in 1991, 1992 and 1993, but didn’t work in the next five years (1994-1998).
Even though five years elapsed from 1994 through 1998, there was a Permanent
Break in Service for NRD purposes only, due to the change in Plan rules effective
January 1, 1998. For 1999 and 2000, Dean earned 2 more Qualified
Years and accrued $6,000 in contributions. Dean vested in 2000 with five
Qualified Years and his benefit will be based on all contributions made ($8,700).
If Dean had not returned to work, he would not have any benefits since he
never would vest.
Table-Example 2:
|
Year
|
Earnings
|
Contributions
|
Vesting Status/Breaks
|
|
1991
|
$15,000
|
$900
|
|
|
1992
|
$15,000
|
$900
|
|
|
1993
|
$15,000
|
$900
|
|
|
1994
|
$0
|
$0
|
Break for NRD
|
|
1995
|
$0
|
$0
|
Break for NRD
|
|
1996
|
$0
|
$0
|
Break for NRD
|
|
1997
|
$0
|
$0
|
Break for NRD
|
|
1998
|
$0
|
$0
|
Permanent Break for NRD
|
|
1999
|
$50,000
|
$3,000
|
|
|
2000
|
$50,000
|
$3,000
|
Vested
|
Example 3:
James earned five Qualified Years from 1985 through 1989. At
that time, however, he would need to earn ten Qualified Years to vest. James
did not earn a Qualified Year from 1990 though 1994. Therefore, he had a Permanent
Break in Service as of December 31, 1994 and all the contributions and Qualified
Years prior to his Permanent Break in Service are lost.
James earned two Qualified Years in 1995 and 1997 with $2,400
in contributions. James is not yet vested, but with the current Break
in Service rules, he will retain the two Qualified Years and $2,400 in
contributions. He must earn three more Qualified Years at any time in order
to have a total of five Qualified Years and vest in his pension benefit.
Table-Example 3:
|
Year
|
Earnings
|
Contributions
|
Vesting Status/Breaks
|
|
1985
|
$20,000
|
$1,200
|
|
|
1986
|
$20,000
|
$1,200
|
|
|
1987
|
$20,000
|
$1,200
|
|
|
1988
|
$20,000
|
$1,200
|
|
|
1989
|
$20,000
|
$1,200
|
|
|
1990
|
$0
|
$0
|
Break
|
|
1991
|
$0
|
$0
|
Break
|
|
1992
|
$0
|
$0
|
Break
|
|
1993
|
$0
|
$0
|
Break
|
|
1994
|
$0
|
$0
|
|
|
1995
|
$20,000
|
$1,200
|
|
|
1996
|
$0
|
$0
|
Break for NRD
|
|
1997
|
$20,000
|
$1,200
|
|
| |
