Nonforfeitable Accrued Clause Samples
The "Nonforfeitable Accrued" clause ensures that certain benefits or rights, once earned by a party—typically an employee—cannot be lost or taken away, regardless of future events such as termination of employment. In practice, this means that once an individual has met the requirements to accrue a benefit, such as a portion of a pension or retirement plan, that portion is guaranteed to them and cannot be forfeited. This clause is essential for providing security to beneficiaries, as it protects their earned interests and prevents employers or other parties from revoking benefits that have already been accrued.
Nonforfeitable Accrued. Benefit Not Exceeding #3500 When a separate participants vested balance does not exceed $3500, the plan allows the employer to separately establish the timing of these distributions, separate from the distribution dates. When you complete this section, you need to balance two concerns: 1) will the timing of the distribution cause the participant to consider it a "severance benefit" and therefore encourage separation from service and 2) the administrative concerns of carrying a non-active account in the plan. Disability - The plan allows you (the employer) to establish a different target payout date for disability distributions in options (f) and (h).
Nonforfeitable Accrued. Benefit subject to the qualified domestic relations order and to the portion of the Participant's Nonforfeitable Accrued Benefit not subject to that order.
Nonforfeitable Accrued. Benefit Not Exceeding $3500. When a separated participants vested balance does not exceed $3500, the plan allows the employer to separately establish the timing of these distributions, separate from the distribution dates. When you complete this section, you need to balance two concerns: 1) will the timing of the distribution cause the participant to consider it a "severance benefit" and therefore encourage separation from service and 2) the administrative concerns of carrying a non-active account in the plan. Usually an employer chooses Option (a) and writes in "the first distribution date" of the "first" plan year beginning after the Participant's separation from service.
Nonforfeitable Accrued. Benefits Exceeds $3,500. See the elections under Section 6.03.