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Retirement Planning
Chapter 3: Qualified Plan Overview/VESTING: DEFINED CONTRIBUTION PLANS
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Chapter Study Session

Chapter 3: Qualified Plan Overview

VESTING: DEFINED CONTRIBUTION PLANS

01.Core Concepts

Employee Contribution 2-Year Eligibility Election* All Employer Contributions Years of Service 3-Year Cliff 2-to-6-Year Graduated 100% 0 0 0 1 100% 100% 0 20% 2 100% 100% 100% 40% 3 100% 100% 100% 60% 4 100% 100% 100% 80% 5 100% 100% 100% 100% 6 * Note: The two-year vesting schedule also applies to employer contributions under a 401(k) plan that makes use of an Automatic Enrollment Feature, as outlined in PPA 2006 (effective for years after 2007).