Did you know that when employer contributions (e.g., profit sharing, safe harbor and matching contributions) to a defined contribution plan are completely discontinued, the plan’s accounts typically must be fully vested? As with all things IRS, it is important to carefully define terms. Although the phrase complete discontinuance may seem straightforward, whether it has occurred is based on all the relevant facts and circumstances (see Treas. Reg. §1.411(d)-2(b). IRS’ guidelines (see Announcement 94-101) also state that there may be a complete discontinuance of contributions when an employer has not made contributions in at least three of the past five years. The IRS recently reviewed Forms 5500 and 5500-SF and contacted employers who reported both distributions and no contributions in the prior five years to see if the vesting requirements had been met. You can read about the IRS’ findings on the IRS website by clicking here.