Expert: Allen - 4/20/2004

Question
Great West Life purchased my company, Canada Life.  Those employees who decided not to accept jobs or who were not offered jobs with Great West are being laid off.

Canada Life has a pension plan with a 3-year cliff-vesting schedule and a 401(k) with a 3-year cliff-vesting schedule.

Great West does not have a pension plan and Canada Life is not hiring new employees. So, there are no new employees entering into the Canada Life pension plan.

Canada Life HR claims the pension plan is not being terminated and they are not automatically vesting all employees.

Based on the 1000 hr rule I will vest in late June.  I am concerned that I may be laid off before late June and will lose all pension benefits as well as 401(K) employer contributions.

Is Canada Life required to vest all employees?  If I get laid off before working 1000 hrs in my third year is there anything I can do to get vested?  

Answer
Sorry to her about your situation. Hope you can locate a new position quickly.
I am responding on the assumption that you are working at a US office of Canada Life.
US law provides that when there is a partial termination of a plan, the affected participants become 100% vested. The courts have generally held that if more than 20% of the participants are terminated by an action of the employer, there is a partial termination. In some instances (and this might qualify), a lower percentage may cause the courts to rule there is a partial termination. The employee terminations can be spread over several months.
Good luck.