In addition, in the case of an employees' trust, section 402(b)(4) will annually tax "highly compensated" participants on the increase in value of their vested
interests, if the plan's coverage is not sufficiently non-discriminatory.
Before passage of ERISA 14 years ago, there were no statutory requirements for vesting,3An employer who provided a pension plan determined if when, and under what conditions employees obtained vested
rights to the accrued benefits.
Although an employer may elect to use the modified special-timing rule and wait until the resolution date to report deferred amounts as FICA wages, it may also choose to include the deferred vested
amounts as FICA wages at any time before the resolution date.
Inland Empire Electrical Workers Pension Plan &,Trust, 3 F3d 1246 (1993), the Ninth Circuit stated that plan participants who left their employment before their interests had become vested
were protected against forfeiture of benefits on plan termination only if they were "affected" by the plan's termination.
The benefits of electing to be taxed in the year of receipt are twofold: (1) the recipient avoids recognizing subsequent appreciation in the partnership interest as compensation income when the interest becomes vested
and (2) any amounts received as partnership distributions are not recharacterized as compensation--the service partner is treated as a partner for purposes of allocating partnership income and loss.
A Federal district court granted Morrell the requested declaratory relief, finding that the health benefits provided under any master agreement were limited to its three-year term and, therefore, were not vested
under either the contract or ERISA.
Chief Financial Officer David Cryer said, "The decision to accelerate vesting of these options was made primarily to reduce compensation costs in the company's future income statements that would have resulted as these options vested
over the next three years.
Asplund will forfeit any portion of the shares not vested
at the time that he ceases providing services to ECHO.
Generally, plan loans secured by a participant's account balance in a defined contribution plan are limited to 50% of the participant's total vested
account balance (disregarding the $50,000 ceiling and the $10,000 floor restriction under Sec.
On July 1, 1991, Gary's partnership interest became fully vested
performance units will result in the delivery to Frey of one share of common stock per vested
2000 and 2004 Employee Stock Option Plans so that they immediately vested
as of December 30, 2005.
These options were immediately vested
as of December 30, 2005.
Options to purchase 464,336 shares of the Company's common stock, which would otherwise have vested
from time to time over the next five years, become immediately exercisable on December 31, 2005 as a result of the Board's actions.
As a result of the accelerated vesting, these stock options, which otherwise would have vested
from time to time through August 2009, became immediately exercisable effective December 29, 2005.