401K Vesting | Definition | What is 401K Vesting?

401K Vesting

401K Vesting Definition

The process whereby specific benefits, such as ownership of funds in a retirement plan, are earned by an employee and cannot be revoked by an employer. Employees attain vested rights to benefits after satisfying specific service or age and service requirements. Once vested, an employee's benefit rights cannot be revoked, even if the employee terminates employment with the plan sponsor. Generally, an employee earns an irreversible percentage interest in the plan for a unit of service.

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