Question: Alpine Products, Inc. wanted to develop a defined benefit pension plan for its employees . It proposed the following for the plan: 1. Employees would
Alpine Products, Inc. wanted to develop a defined benefit pension plan for its employees . It proposed the following for the plan: 1. Employees would have to work for the company for 1 year to become eligible to participate in the plan . 2. The plan benefit formula provides a 3 % per year of service for top executives and a 2% per year of service for rank and file employees . 3. Employer contributions only vest after 15 years . 4. It would use a "pay -as- you-go " system so that current contributions would be used to pay retiree benefits . Which of these provisions violates ERISA ? Explain .
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