vesting
vesting definition - finance
The
right that an employee has to receive contributions made by their employers to
an employer-contributed pension plan, a 401(k) plan, or a profit-sharing plan.
The federal government requires that employees must be fully vested, or be
given the right, to own all of their employerÂ’s contributions after a certain time
period. Usually vesting rights are given on a graduated schedule, with 20
percent of the contribution being vested each year.
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
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