Pension Protection Act

HRBiker

Now that the Pension Protection Act requires 3-year 100 percent vesting, or 2- to 6-year graded vesting for all employer contributions to defined benefit plans, does this mean that the only consequence of having a top-heavy db plan is that contributions for non-key employees must be at least 3 percent of compensation?

ERISAmaven

Yes this is true for plan years beginning in 2007. In fact the contribution may be the lesser of 3 percent or the same percentage as is allocated to the key employee receiving the highest percentage contribution.