What plans are subject to ERISA’s vesting rules?

A plan will not be a “qualified” plan under IRC Section 401 unless it satisfies the minimum vesting standards established under IRC Section 411 (which are mirrored under ERISA Section 203(a). Under ERISA, these vesting rules apply to all pension plans that are established or maintained by any employer engaged in commerce or in any industry or activity affecting commerce, or by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce, or both. As such, both qualified and nonqualified plans that provide for retirement income or result in the deferral of income to termination or retirement are generally subject to the vesting requirements of ERISA.