Vesting Schedule
What is Vesting and How Does it Work?
“Vesting” in a retirement plan means ownership. This means that each employee will vest, or own, a certain percentage of their account in the plan each year. An employee who is 100% vested in his or her account balance owns 100% of it and the employer cannot forfeit, or take it back, for any reason.
Amounts that are not vested may be forfeited by employees when they are paid their account balance (for example, when the employee terminates employment) or when they don’t work more than 500 hours in a year for five years.
Vesting Schedule
We Will Honor Existing Years of Service (Since Last Hire Date) When Determining Your Vesting %.
Employee vs Employer Contributions
An employee's own contributions to the plan are always 100% vested, or owned, by the employee. But company matching funds vest at 20% per year for six years (see the table above for the full vesting schedule).
Once you're fully vested, you can take the entire company match with you when you part ways with your employer. If you're not fully vested, you'll get to keep only the portion of the employer match portion that you've earned through years of service. The upshot: It takes six years before you own all of your company matching contributions.