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401k Vesting

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Sephious13

New member
I just accepted an offer with a new company and have started going through the orientation and on-boarding process. During this discussion, my employer revealed that they have a 401k vesting policy. This policy was not made apparent to me prior to my accepting the offer, and would have impacted my decision, as I don't expect to stay in this position for the required to time to become fully vested.

I am curious if I have any recourse to push for an immediate fully vested 401k. Thank you.
 

PayrollHRGuy

Senior Member
Unless you previously had a contract that said there was no such policy, you have no recourse that I can think of other than simply not taking the job.
 

HighwayMan

Super Secret Senior Member
Unless you signed a contract it would seem as if you're not obligated to take the job.

I'm sure they wouldn't change a policy like that just for you.
 

adjusterjack

Senior Member
Isn't a plan without a vesting period pretty uncommon?
Yes.

An employee is always 100% vested in his own contributions but often takes several years to be fully vested in the employer's contributions.

I don't expect to stay in this position for the required to time to become fully vested.
Which is why employers generally require gradual vesting over a period of years.

This policy was not made apparent to me prior to my accepting the offer
You could have asked.
 

cbg

I'm a Northern Girl
I just accepted an offer with a new company and have started going through the orientation and on-boarding process. During this discussion, my employer revealed that they have a 401k vesting policy. This policy was not made apparent to me prior to my accepting the offer, and would have impacted my decision, as I don't expect to stay in this position for the required to time to become fully vested.

I am curious if I have any recourse to push for an immediate fully vested 401k. Thank you.
You not only have no recourse, this is one of those cases where they would be in violation of the law if they were to provide you with immediate vesting when all other employees have to vest. It is unusual in the extreme for a plan to allow for immediate full vesting - I don't say it never happens but it is very, very much the exception rather than the rule. It is so unusual (in 40 years of administering employer benefits I have ONCE seen such a plan and they don't have it any more) that I'm sure it never even occurred to them that you would expect immediate vesting.
 

Pinkie39

Member
You not only have no recourse, this is one of those cases where they would be in violation of the law if they were to provide you with immediate vesting when all other employees have to vest. It is unusual in the extreme for a plan to allow for immediate full vesting - I don't say it never happens but it is very, very much the exception rather than the rule. It is so unusual (in 40 years of administering employer benefits I have ONCE seen such a plan and they don't have it any more) that I'm sure it never even occurred to them that you would expect immediate vesting.
I used to work for the national offices of a church. The employer contributed the equivalent of 15% of each employee's income to a pension fund. Employees were fully vested from the day of hire.

BUT the catch was that if you left employment, you could not withdraw the funds unless they were $10,000 or less or you were 55 or older. I left in 2008, so 12 years ago, and I'm still not able to withdraw my pension funds.
 

adjusterjack

Senior Member
There's a big difference between a 401(k) plan and a pension plan. Which one did you have at the church?

Though what the church did is irrelevant to what your current employer is doing.
 

cbg

I'm a Northern Girl
Any employer could have a 401(k) vest immediately if they wanted to. And the money that an employee puts in is always vested.

But if the plan document states that employer contributions vest over 3 years or 5 years or 10 years, then under the law that is carved in STONE. NO exceptions are possible - the employer MUST adhere to the plan document.

Regardless of what type of retirement plan we are talking about, however, vesting and distribution rules are unrelated.
 

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