FAQ 170: Vesting--Formula for partially paid out participant |

Problem: I have a small vesting issue: Beg bal 17352.20 Earnings 1061.71 Distrib -6940.88 End bal 11473.03 Vest % 60 Vest bal 3824.34 I calculate that it should be 11473.03 + 6940.88 = 18413.91 x .6 = 11048.35 - 6940.88 = 4107.47 I don't show other distribution activity for her. Is there somewhere else I should look to see how the system is coming up with a vested amount of 3824.34? |

Solution: There actually is a formula when a person is terminated and partially paid out. Here's the formula: Ending Balance + Prior Distribution - Current Interest = Net Balance x Vesting Percentage = Vested Balance - Prior Distribution = Vested Balance used in earnings allocation x Current Interest/(Net Balance - Prior Distribution) = Earnings attributable to Vested Balance + Vested Balance used in earnings allocation = Vested Balance So the calculation in this case would be: Ending balance 11,473.03 + withdrawal + 6,940.88 - current interest - 1,061.71 ___________ Net balance 17,352.20 % vested 60% ___________ Vested balance 10,411.32 - withdrawal - 6,940.88 ___________ Vested bal. for earnings 3,470.44 x earnings x 1,061.71 / (net bal-withdrawal) / 10,411.32 (17,352.20 - 6,940.88) ___________ Earnings attrib. to vested 353.90 Vested balance for earnings 3,470.44 ___________ Vested balance 3,824.34 |