Vested Benefits

Vested Benefits

Benefits from a pension or other retirement account that belong to the employee and that he/she keeps regardless of his/her future employment with the company offering the pension. While different companies have different rules as to the number of years at which benefits vest, the time period is usually five years. If an employee quits before five years (or before the set time period), he/she loses the benefits that he/she has accrued up to that point. If the employee quits after the benefits vest, he/she may keep them.

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vested benefits

Pension benefits that belong to an employee independent of his or her future employment. An employee usually becomes vested after five years of employment with the same firm, although there are numerous exceptions requiring longer employment. Compare pension plan.

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Vested Benefits

Pension benefits owned by the taxpayer.