Vesting Rules

Table 2 below shows the current vesting schedules, as of 2002, for employer matching 401(k) contributions, as discussed above.

Table 3 is for employees receiving employer contributions other than matching 401(k) contributions, including those in a defined benefit plan.  It is also for employees in a defined contribution plan who left an employer after 1988 (and for employer matching 401(k) contributions prior to 2002).

Table 4 is for plans you left before 1989.

Generally, an employer must count your years of service for vesting credit starting with your date of employment.  Two exceptions provide that your employer may start counting your years of service with the first plan year following (1) your 18th birthday if you were under 18 years of age when you started working there, and (2) the date you start contributing to a 401(k) plan if you elected not to contribute when you first were eligible.

Plans can allow employees the right to employer-provided benefits sooner than indicated in the following tables.

Minimum Vesting Requirements Under ERISA
Employer Contributions
(Use Table in Effect on Date You Left Employer)

Table 2: Effective Date 01/01/02 - Present for 401(k) Matching Contributions

Graduated Vesting

Years of Service

Non-forfeitable Percentage

2

20%

3

40%

4

60%

5

80%

6

100%

Cliff Vesting
Less than 3 years of service - 0% Vested
At least 3 years of service - 100% Vested

Table 3: Effective Date 01/01/89 - Present* for Other Employer Contributions

Graduated Vesting

Years of Service

Non-forfeitable Percentage

3

20%

4

40%

5

60%

6

80%

7

100%

Cliff Vesting
Less than 5 years of service - 0% Vested
At least 5 years of service - 100% Vested

Table 4: Effective Date 1974 - 12/31/88** for all Employer Contributions

Graduated Vesting

Years of Service

Non-forfeitable Percentage

5

25%

6

30%

7

35%

8

40%

9

45%

10

50%

11

60%

12

70%

13

80%

14

90%

15

100%

Cliff Vesting
Less than 10 years of service - 0% Vested
At least 10 years of service - 100% Vested

Rule of 45 - If employee's age and years of service total 45, then 50% of the benefits must be vested with at least 10% vesting for each year thereafter.