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Employee's Vesting Requirements

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Who Oversees Employee Pension and Benefit Plans?

ERISA was created to monitor health plans and pensions offered by private employers. Specifically, ERISA provides protection to health plan recipients and beneficiaries. Tax breaks are given to employers who create pension plans that follow federal guidelines such as ERISA. ERISA also protects employee pensions from mismanagement of pension funds. The Labor Department and IRS make sure the employees receive the promised pension and benefits.

What Are ERISA's Vesting Requirements?

An employee is vested in their pension plan if they have a non-forfeitable right in their pension plan. In the case of employee contributions to pension plans, such as 401(k)'s, employees are always vested in their benefits. If you change jobs prior to retirement, ERISA requires that your previous employer provide you with all vested benefits. Under ERISA there are two basic vesting schedules. Under the three year schedule, workers become completely vested after three years of service. Under the six year schedule, workers become 20% vested after the first two years of service, and 20% vested after each additional four years. Thus after six years, a worker will be completely vested. 

How Can a Lawyer Help?

If you believe your employer has acted improperly with regard to your benefits or pension, a benefits attorney specializing in ERISA can help you resolve the dispute and make sure you receive the benefits you are entitled to. If you are an employer and are concerned about ERISA compliance, a benefits attorney can help you establish a benefit plan that protects you and your employees. 

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 01-05-2015 01:52 PM PST

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