The purpose of the Worksheet Number 2A (Form
5624) and this explanation is to identify major
problems in the area of plan vesting. However, there
may be issues not mentioned in the worksheet that
could affect the plan’s qualification.
The worksheet applies only to plans to which
Internal Revenue Code section 411 applies, except
plans mentioned in section 411(e) (such as
governmental plans) and plans that cover participants
who are employed in maritime or seasonal industries.
Generally, a “Yes” answer to a question on the
worksheet indicates a favorable conclusion while a
“No” answer signals a problem concerning plan
qualification This rule may be altered by specific
instructions for a given question. Please explain any
“No” answer in the space provided on the worksheet.
The sections cited at the end of each paragraph of
explanation are to the Internal Revenue Code, the
Income Tax Regulations, and the Department of Labor
(DOL) Regulations; Rev. Rul. means Revenue Ruling.
A basic requirement to keep in mind for the vesting
standards is that each participant’s vested interest
must satisfy the statutory minimum at all times. A plan
that generally provides faster vesting than the
statutory minimum will not fail to qualify merely
because the plan does not adhere to the specific
language found in the statute. For example, a plan that
provides full and immediate vesting at age 21 would
satisfy the statutory minimum vesting requirements
even though language about a requirement for years
of service is not found in the plan.
The technical principles in this publication may be
changed by future regulations or guidelines.
Department of the Treasury
Internal Revenue Service
Document 6390 (Rev. 12-98) Cat. No. 45134P
I. Years of Service And Breaks In Service
This section applies only to plans in which years of service
are a factor in determining a participant’s vested interest.
Therefore, DO NOT complete this section if the plan