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Towards a fully vested era

At points after the implementation of ERISA, there were graded vesting schedules as long as 10 years and every few years, we would be forced to eliminate the 7-year schedule for certain law changes. I always say that there will be a day when all contributions will be required t be fully vested and employers are pointing that way too.

How so? According to Vanguard, nearly half of plans they served as recordkeeper, immediately vested participants in employer matching contributions, while 25% of plans with employer matching contributions used a 5- or 6-year graded vesting schedule.

I think more and more employers will see 401(k) plans as an effective tool to retain and recruit employees, so they willfully vest contributions before it’s mandated by the government.

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