VESTING: EXAMPLE 2
01.Core Concepts
Ronda has attained four years of service with Pharmex Corporation. Pharmex sponsors a defined benefit plan that is not top-heavy and does not permit employee contributions. Ronda has an accrued benefit to date under the plan of $30 per month at retirement. If the plan follows a 3-to-7-year graduated vesting schedule and Ronda terminated her employment today, she would be entitled to a benefit of $12 (40% x $30) per month at her retirement. All Employer Contributions Years of Service 3-to-7-Year Graduated 0 1 0 2 20% 3 40% 4 60% 5 80% 6 100% 7