Vesting is your ownership in your retirement account balance. You are always 100% vested in your Employee Deferrals, Rollover Contributions and in the associated investment gains. However, money contributed by the Employer may be subject to a vesting schedule. (See your plan document for the specific vesting schedule for your plan).
Should you leave the company prior to the required service to be fully vested in your entire account balance, you will be entitled to receive the vested amount only. Contributions will not continue to vest after termination of employment.
Many employers use a time-based vesting schedule, in which employees earn a percentage of the Employer Contributions over time according to a schedule.
Example Vesting Schedule:
|Years in Plan||1||2||3||4|
|% of Vesting||25%||50%||75%||100%|
Using the above schedule, you would be 100% vested in your employer's contributions after 4 years of service. This example is for illustrative purposes only. Please see your plan document for plan vesting schedule.
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