When does your employer's match vest? (Poll)
When does your employer's match vest? (Poll)
My employer of nearly three years has had a simple IRA plan in which the company matching contributions of up to 3% were immediately vested. They have now grown in size and have announced that as of the first of the year they are going with a 401k plan. They are going to bump up the match to 100% of the first 3% of contributions and 50% on the next two percent of contributions. Looking through the literature I was disappointed to find a vesting schedule of 2 years - 20%, 3 years - 40%, 4 years - 60%, 5 years - 80% and 6 years -100% for the company match. Many of the employees are like myself, a retiree from a local technical industry and are working part time in retirement. As such whether or not I'll ever work six years for them is in question. I tried to have some input to the new plan when I learned of it but got only a kind thanks for the info when I offered. I've already pointed out to management that this may be viewed unfavorably by myself and others including new hires.
My former full time employer had a 2 year 50%, 3 year 100% vesting for the employer contributions to the 401k.
I am curious as to what others have for their plans.
NOTE THAT I INTENDED FOR THE POLL TO REPRESENT YEARS UNTIL FULLY VESTED! THANKS
My former full time employer had a 2 year 50%, 3 year 100% vesting for the employer contributions to the 401k.
I am curious as to what others have for their plans.
NOTE THAT I INTENDED FOR THE POLL TO REPRESENT YEARS UNTIL FULLY VESTED! THANKS
Last edited by Carl53 on Sat Dec 10, 2011 9:07 am, edited 1 time in total.
- stevewolfe
- Posts: 1676
- Joined: Fri Oct 10, 2008 7:07 pm
Re: When does your employer's match vest? (Poll)
Immediate vesting. It used to be 1 year wait to contribute anything (which I really disliked) and a 20% per year vest years 1-5 (which were really years 2-6 of employment) - that is similar to what you outline above. That change happened 4 years or so ago to go do immediate vesting.
Re: When does your employer's match vest? (Poll)
My wife's state university pension is partially vested after 5 years and fully vested after 10 years.
Re: When does your employer's match vest? (Poll)
I just received a response from our general manager stating that our employer match would be immediately vested. I pointed out a quote from the company issued documentation says otherwise so we'll see. There is to be an information session Thursday.
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- Posts: 3314
- Joined: Wed Feb 03, 2010 9:17 am
Re: When does your employer's match vest? (Poll)
5 year vesting, but once you hit the 5th year, all further contributions are immediately vested.
Employer match used to be 6% of your salary; it goes to 8% on January 1.
Employer match used to be 6% of your salary; it goes to 8% on January 1.
- englishgirl
- Posts: 2508
- Joined: Thu Mar 01, 2007 4:34 pm
- Location: FL
Re: When does your employer's match vest? (Poll)
The staff handbook states that money is vested in 6 years, on the same schedule as yours. However, somewhere else there's some fine print that "1 year" is equal to 1000 hours of work. So it actually vests a lot quicker than 6 calendar years for full time employees. I forget what the time period actually was, and am too lazy to go and calculate, so I didn't vote.
Not that we get a match any more (never been reinstated after it was cancelled in 2009), but we do get profit sharing which vests according to the same schedule.
Oh, and all money is vested according to your employment year, not the year of the contribution. Thus, a contribution in year 8 is immediately 100% vested, and you don't have to wait another 6 years for that money to be yours.
Not that we get a match any more (never been reinstated after it was cancelled in 2009), but we do get profit sharing which vests according to the same schedule.
Oh, and all money is vested according to your employment year, not the year of the contribution. Thus, a contribution in year 8 is immediately 100% vested, and you don't have to wait another 6 years for that money to be yours.
Sarah
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Re: When does your employer's match vest? (Poll)
7 years, but essentially the same format as yours (3 years at 20%, 4 years at 40%, etc). There is no contribution until your third year, either. The amounts contributed (profit sharing, not matching, actually) vary, going from 3.5% of the year's salary in year 3 to 9.5% in years 14+, with the first bump coming during years 7 (5.5% instead of 3.5%).
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- Location: San Jose
Re: When does your employer's match vest? (Poll)
match immediate to salary + bonus, non-SIMPLE 401k/other in your oll
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- Joined: Mon May 17, 2010 9:04 am
Re: When does your employer's match vest? (Poll)
A portion of our match is "free money", ie contributed by the company regardless of our contribution. It's vested instantly. The rest is fully vested after 2 years. The provisions are quite generous, and since there are low cost funds too, I am very fond of our 401k.
Re: When does your employer's match vest? (Poll)
The match is now immediately vested. However this happened after the company pension was frozen 17 years ago. Prior to that it was a prorated 5 year vesting.
Re: When does your employer's match vest? (Poll)
We get variable matching and profit sharing contributions.
Upside is we have often gotten far more employer contributions than most firms,
and immediate vesting, downside is the "variable" matching and "profit" sharing.
I wonder each year what we'll get. We had no "profit" sharing last year,
which cut my employer's usual contribution in half, and even the "variable match"
is always at risk, but if we get anything, immediate vesting.
Many deferred compenstation plans have options that allow you to keep your
deferred income after retirement, assuming you are over some stated retirement
age (can't declare yourself retired at 40, sorry). You usually have to wait the same period
of vesting as originally stated, but retirement at the stated age is not treated same as
if you quit and went to a competitor.
Upside is we have often gotten far more employer contributions than most firms,
and immediate vesting, downside is the "variable" matching and "profit" sharing.
I wonder each year what we'll get. We had no "profit" sharing last year,
which cut my employer's usual contribution in half, and even the "variable match"
is always at risk, but if we get anything, immediate vesting.
Many deferred compenstation plans have options that allow you to keep your
deferred income after retirement, assuming you are over some stated retirement
age (can't declare yourself retired at 40, sorry). You usually have to wait the same period
of vesting as originally stated, but retirement at the stated age is not treated same as
if you quit and went to a competitor.
Re: When does your employer's match vest? (Poll)
If you are thinking that, for example, working 2,000 hours in one calendar year would count as two vesting years, then I think you are going to get an unpleasant surprise. What the 1,000 hours criterion has meant in any plan that I have been associated with is that you have to have done 1,000 hours or more in that calendar year for it to count for vesting. Additional hours don't get you anything extra.englishgirl wrote:The staff handbook states that money is vested in 6 years, on the same schedule as yours. However, somewhere else there's some fine print that "1 year" is equal to 1000 hours of work. So it actually vests a lot quicker than 6 calendar years for full time employees.