Question

Company XYZ has the following vesting schedule in place for its 401(k) plan.

Years of Service Vested Percentage
Less than 1 0%
1 25%
2 50%
3 75%
4 or more 100%
Which statement describes how Company XYZ uses vesting with employer contributions to 401(k) plans?

A.
When employer contributions are added to a 401(k) account, the funds are immediately owned by the employee.
B.
After working a specific amount of time for the employer, the employer contributions become the full property of the employee.
C.
Employees keep employer contributions when they move to a different job, no matter how long they have worked for the employer.
D.
Employees in managerial positions own employer-contributed funds immediately, while other employees must work for the employer a minimal period of time to own employer-contributed funds.

Answer 1

thoughts? in the context of 401k plans, "vesting" can be thought of as ownership of funds, with the vested % being the % of the balance owned by the employee