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Vesting Answers What does it mean to be fully vested? Vesting refers to ownership. You are always 100% vested in your contributions to the 401(k) plan and their earnings - you own them. Employer contributions (matching and/or profits sharing) to your account are usually subject to a vesting schedule that is linked to your years of service. For example, your plan may provide that you will vest 20% with each year of service. Under this scenario, you would be fully vested after 5 years of service, meaning you not only own your contributions and earnings, but all of your employer's contributions plus earnings. What if I leave the company before I'm fully vested? You will only be able to take with you that portion of your employer's contributions plus earnings in which you are vested. For example, if you're 60% vested, you would be leaving behind 40% of your employer's contributions plus earnings.
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