Generally, since January 1, 2002, the maximum vesting schedule
applicable to matching contributions has been a three-year cliff vesting schedule
According to this survey--whose relevant figures are summarized in Table 2--87% of DB plan participants were in plans that offered a 10-year cliff vesting schedule
, while 10% were offered graded vesting schedules
of at least 10 years.
Your summary plan description (SPD) will spell out how the vesting schedule
for your particular plan works.
These differences have implications for interperiod financial statement analysis, as profitability analysis such as return on investment and return on equity ratios is potentially understated for firms' using graded vested attribution over those firms using straight-line attribution, especially in the earlier years of the vesting schedule
When working with younger executives, the use of such a service-based vesting schedule
can be problematic.
IRS Notice 2007-7 has clarified that employer discretionary contributions remitted to a plan trust prior to 2007 may remain under the pre-PPA vesting provisions of either a five year cliff vesting schedule
or a 3/20 schedule graduating at 20% per year after three years and culminating in 100% vesting after seven years.
All plans must adopt a vesting schedule
permitted under the Internal Revenue Code and ERISA, which give each participant a nonforfeitable right to a certain percentage of his account balance depending upon his years of service with the company.
CHECK THE VESTING SCHEDULE
, which provides a timetable for how soon the money your employer contributes belongs to you.
The new vesting schedule
does not apply to plans under collective bargaining agreements or to employee vesting' in other types of contributions.
The new options will have an exercise price equal to the market value of CSC stock May 30, and will generally have the same terms and conditions as the options tendered for exchange, including the same vesting schedule
and vesting start date.
For participating employees, Oakland County also annually contributes an amount equal to 6 percent of their salary, subject to a seven-year graded vesting schedule
(effective from the first day of employment.
Slightly more than one-fourth of the workers were in plans that met ERISA'S Vesting schedule