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How does vesting work? Vesting normally begins from date of hire at the company where participants earn a year of service for each "plan year" that they work at least 1000 hours. Every year of service completed generally moves the participant one step up on the vesting schedule. For example, if a plan had a vesting schedule of 0%-20%-40%-60%-80%-100%, it would take six years to become 100% vested. If a participant terminated after two years of service had been completed then the participant would be 20% vested, after three years the participant would be 40% vested, etc. Of course, your plan's vesting schedule may vary from the one shown in this example. What kinds of contributions must always be 100% vested? Salary deferral contributions and rollover contributions.
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