VESTING SCHEDULES
Vesting determines what is yours to keep if you leave
employment. A participant must be 100% vested in his benefit when he
reaches retirement age. 100% vesting is usually provided upon death
or disability as well. Qualified Plans must vest benefits at least
as rapidly as one of the following tables.
Years Years
of Service Vested % of Service Vested %
0 0% 0 0%
1 0% 1 0%
2 0% 2 0%
3 0% 3 20%
4 0% 4 40%
5 100% 5 60%
6 80%
7 100%
If a plan is Top-Heavy (more than 60% of benefits go to the Key Employees),
the choices default to one of the following tables, or optionally a more
favorable one. Matching contributions under a 401(k) plan must be at least
as favorable as these.
Years Years
of Service Vested % of Service Vested %
0 0% 0 0%
1 0% 1 0%
2 0% 2 20%
3 100% 3 40%
4 60%
5 80%
6 100%
A Plan that provides that an employee must complete more than one year
of service (maximum of 2 years) must vest participants 100% upon entry
into the plan.
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