Chapter 3: Qualified Plan Overview

01.Core Concepts

• Required vesting for top heavy plans • 2-to-6 year graduated, or • 3-year cliff • Minimum Funding • Defined Contribution Plans  Employer must provide non-key employees with a contribution equal to at least 3% of employees' compensation. • Except if key employees’ contribution is less than 3%. • Defined Benefit Plans  Employer must provide non-key employees with a benefit equal to 2% times years of service (limit 20%) times employee’s average annual compensation