When are employees vested in a 401(k) plan?
Employees are always vested in, or entitled to, the amounts they contribute to the plan. An employee may also be entitled to all or a portion of any contribution made by the employer, depending on the vesting schedule adopted by the employer. Companies may require employees to complete a certain number of years of service with the employer before employer contributions become fully theirs. Some plans provide for a graduated vesting schedule, so that the employee can earn the right to a portion of their employer contributions as they complete a specified number of years of service.
