What does it mean in a Company when you are "Vested"?

Question

I think it has something to do with reitrement

Answer 1

Vesting, when used in regards to retirement accounts, means how much of the company money you will get to take with you when you leave. Most companies vest over a 5 year period with you getting 20% each year and 100% after 5 years.

This means that if your company contributes $1000 to your 401k account you will get to keep:

$200 after 1 year
$400 after 2 years
$600 after 3 years
$800 after 4 years
$1000 after 5 years

The longer you stay the more you get to keep.

Answer 2

When your retirement account is fully vested, you have legal ownership of the company's deposits to the account. You always have legal ownership of your own contributions but do not have ownership of the company's deposits until you are vested.

All defined contribution plans must vest in 5 years or less. Many companies will vest well before that, typically in 1 - 3 years. A few even vest from day one.

Answer 3

Certain benefits require that you have so many years of service before you can take them with you when you leave. This is what vesting is. It normally refers to 401k type plans or pension plans. An example would be if you have to be with a company for 5 years before you were vested and you left after 4 years you would not get to take all of the money the company put into a 401k match or pension plan. You would however get to take any money you invested

Answer 4

Fully Vested

Answer 5

Companies are usually talking about the 401K or retirement plan.

They pay in a portion during your employment there. However if you leave before you are vested they get the money.

So many do it in increments--three years 30 % and it goes up. Usually by seven years most companies vest you. It may even be the law.

Hope this helps.

Answer 6

It means that you now have 100% of funds or options that your company has been giving to you. For example on a 401k plan if they were contributing any funds to it that money is now yours. Until your vested if you were to leave the company they could take what they had given you back.

Answer 7

It means the day that you can "own" what's in the account that someone else put in the account.
So I worked for this company called at various times Cap Gemini America, Sogeti Inc, and Gemini Consulting. When I put money in my retirement fund, they put in a small percentage of what I put it. I "owned" what they put in my retirement account after 5 years.

Unfortunately, they laid me off 1 week before the 5 years was reached (and therefore was not vested), so they took back about $15,000 they had put into my retirement account. I got to keep the $50,000 I had put into it out of my own earnings.

Answer 8

Generally refers to retirement benefits, may refer to other employee benefits. Each employer who offers an employee benefit does so according to a plan. The plan includes a contract between employer and employee. When the employee satisfies the requirements to qualify for a benefit, such as employment for a specified period of time, the employee is vested as to the benefit, and holds a right to the benefit which is legally enforceable. Sometimes after vesting the contract requires the employee to meet conditions in order to retain the vested right. As to any specific benefit, ask the employer for a copy of the plan.

Answer 9

This Site Might Help You.

RE:
What does it mean in a Company when you are "Vested"?
I think it has something to do with reitrement

Answer 10

Basically it relates to stock that the company has granted to you and generally you get this stock in tranches - when it is made available for you to sell it is considered "vested"