Common use of ADOPTION AGREEMENT ELECTIONS Clause in Contracts

ADOPTION AGREEMENT ELECTIONS. The questions in this Article II only need to be completed in order to override the default provisions set forth below. If all of the default provisions will apply, then these questions should be skipped. Unless the employer elects otherwise in this Article II, the following defaults apply: 1) The vesting schedule for matching contributions will be a 6 year graded schedule (if the plan currently has a graded schedule that does not satisfy EGTRRA) or a 3 year cliff schedule (if the plan currently has a cliff schedule that does not satisfy EGTRRA), and such schedule will apply to all matching contributions (even those made prior to 2002). 2) Rollovers are automatically excluded in determining whether the $5,000 threshold has been exceeded for automatic cash-outs (if the plan is not subject to the qualified joint and survivor annuity rules and provides for automatic cash-outs). This is applied to all participants regardless of when the distributable event occurred. 3) The suspension period after a hardship distribution is made will be 6 months and this will only apply to hardship distributions made after 2001. 4) Catch-up contributions will be allowed. 5) For target benefit plans, the increased compensation limit of $200,000 will be applied retroactively (i.e., to years prior to 2002).

ADOPTION AGREEMENT ELECTIONS. The questions in this Article II only need to be completed in order to override the default provisions set forth below. If all of the default provisions will apply, then these questions should be skippedskipped and the employer does not need to execute this amendment. Unless the employer elects otherwise in this Article II, the following defaults apply: 1) The vesting schedule for matching contributions will be a 6 year graded schedule (if the plan currently has a graded schedule that does not satisfy EGTRRA) or a 3 year cliff schedule (if the plan currently has a cliff schedule that does not satisfy EGTRRA), and such schedule will apply to all matching contributions (even those made prior to 2002). 2) Rollovers are automatically excluded in determining whether the $5,000 threshold has been exceeded for automatic cash-outs (if the plan is not subject to the qualified joint and survivor annuity rules and provides for automatic cash-outs). This is applied to all participants regardless of when the distributable event occurred. 3) The suspension period after a hardship distribution is made will be 6 months and this will only apply to hardship distributions made after 2001. 4) Catch-up contributions will be allowed. 5) For target benefit plans, the increased compensation limit of $200,000 will be applied retroactively (i.e., to years prior to 2002).