Since 401k's are an employer-employee trust or matching plan, money is deposited into the account for the benefit of the employee.
When money is contributed to a 401k plan by the employee of a company - that contribution is 100% the employees money should he or she leave a company. However the employer portion of the contribution is not 100% vested to the employee at the time of contribution if the person has not completed their vesting period. The rules and regulations must be disclosed at the time of plan participation.
To be 100% vested, a company employee involved in the corporate retirement plan must be at their job a certain persiod of time before 100% of the contributions made by the company in the 401k for the benefit of the individual is all theirs to withdraw, transfer or rollover. This period is usually 5 years or so.
A 401 k plan is a company retirement account that was set up as a loyalty program as well as an investment account. To be 100% vested is an important time period to look at especially is the company is matching at a high dollar amount.
Some people at companies will have different schedules to when they are fully vested.
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Some 401k's have high matching amounts that employers give to give an incentive for the employee to contribute high amounts and to participate in the plan. Sometimes the vesting periods are longer which means it will take more years before the employer benefits become 100% employee benefits.
Each participating employee needs to weigh the pros and cons on how full their 401k participation should be.
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