Author Topic: Vesting Win  (Read 1112 times)

wudged

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Vesting Win
« on: February 17, 2021, 08:09:48 PM »
My previous employer had a vesting schedule for the matching portion of the retirement plan. The schedule was setup for vesting at 25% per year of employment. I left between 3 and 4 years, meaning I was only 75% vested in their eyes.

As I was about to request a rollover, I went through the SPD and noticed that it had language defining a year of vesting as being compensated for a minimum of 1,000 hours over the year. I calculated my total hours compensated for the final partial year and it came out to just over 1,000. I contacted the HR department who, unsurprisingly, told me I was crazy and stopped responding to my messages.

My next step was to file a complaint with the department of labor at https://www.askebsa.dol.gov/WebIntake/ . It took a few months, but they finally got around to sending a letter to the administrator of the plan, and in no time at all I was notified that my vesting level was now set at 100%! I requested the rollover and sure enough the full amount was available - an (almost) instant 33% increase.

Perform your due diligence!

Fru-Gal

  • Bristles
  • ***
  • Posts: 314
Re: Vesting Win
« Reply #1 on: February 17, 2021, 11:17:59 PM »
Congrats!

Dicey

  • Senior Mustachian
  • ********
  • Posts: 15098
  • Age: 63
  • Location: NorCal
Re: Vesting Win
« Reply #2 on: February 17, 2021, 11:44:32 PM »
Wow, those last few hours were valuable indeed!

cool7hand

  • Bristles
  • ***
  • Posts: 498
Re: Vesting Win
« Reply #3 on: February 18, 2021, 07:28:14 AM »
Impressive. Most impressive!

Car Jack

  • Handlebar Stache
  • *****
  • Posts: 1810
Re: Vesting Win
« Reply #4 on: February 19, 2021, 06:44:20 AM »
Sounds like the attorneys who set up that plan went to Clown College instead of law school.  Every plan I've ever participated in has the phrase: "must be employed in good standing on the date of each vesting to receive each installment" or some such.  Same for any bonus, RSU, profit sharing.  Bank error in your favor, collect $50.  :D

socaso

  • Pencil Stache
  • ****
  • Posts: 679
Re: Vesting Win
« Reply #5 on: February 24, 2021, 09:24:57 AM »
I love a righteous victory like this! Congratulations!

Retireatee1

  • Stubble
  • **
  • Posts: 162
  • Location: Fort Mill, SC
    • Retireator.org
Re: Vesting Win
« Reply #6 on: February 27, 2021, 11:35:00 AM »
Good for you.  The Pension Protection Act of 2006 limits these to either a three year cliff or 6 year graded vesting schedule.

I think I'd prefer the three year cliff vest.  I can do three years at a company standing on my head.  Four to six can be...complicated.  :-)

My first job had a employer-paid plan with a 7-year cliff vest (illegal today).  I endured the seven years and walked away with one finger up in the air.


seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 5834
  • Age: 36
  • Location: Seattle, WA
    • My blog
Re: Vesting Win
« Reply #7 on: February 27, 2021, 12:35:33 PM »
Sounds like the attorneys who set up that plan went to Clown College instead of law school.  Every plan I've ever participated in has the phrase: "must be employed in good standing on the date of each vesting to receive each installment" or some such.  Same for any bonus, RSU, profit sharing.  Bank error in your favor, collect $50.  :D

I think this sort of vesting schedule is actually pretty common in the 401(k) world. My wife's previous employer had this same exact same standard that 1,000 hours was required for a year of vesting service. You get the full match put into a separate sub-account of your 401(k) right away. If you leave before you have achieved the required number of years of vesting service, they take out X% from that match account after you leave.

ender

  • Walrus Stache
  • *******
  • Posts: 6072
Re: Vesting Win
« Reply #8 on: February 27, 2021, 12:49:17 PM »
I vested in a pension for similar reasons, I was there between 4-5 years and so I'm vested, even though I needed "5 years" to vest.

TomTX

  • Magnum Stache
  • ******
  • Posts: 4462
  • Location: Texas
Re: Vesting Win
« Reply #9 on: February 27, 2021, 07:23:29 PM »
Good job.

fuzzy math

  • Handlebar Stache
  • *****
  • Posts: 1239
  • Age: 39
  • Location: At the lake
Re: Vesting Win
« Reply #10 on: February 28, 2021, 01:18:44 PM »
all the more reason to read plan info. great catch!!

wudged

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: Vesting Win
« Reply #11 on: March 01, 2021, 05:10:00 AM »
Sounds like the attorneys who set up that plan went to Clown College instead of law school.  Every plan I've ever participated in has the phrase: "must be employed in good standing on the date of each vesting to receive each installment" or some such.  Same for any bonus, RSU, profit sharing.  Bank error in your favor, collect $50.  :D

I think this sort of vesting schedule is actually pretty common in the 401(k) world. My wife's previous employer had this same exact same standard that 1,000 hours was required for a year of vesting service. You get the full match put into a separate sub-account of your 401(k) right away. If you leave before you have achieved the required number of years of vesting service, they take out X% from that match account after you leave.

I'm not positive, but I think it's an ERISA requirement.