Pensions vesting

XIV. Employees terminated due to budget cuts or a reduction in force will have first priority in rehiring for two years beyond their termination date. Employees terminated with a minimum of 10 years of service shall have fully vested pension rights. 

NOTE Generally, employees covered by wealthbuilding benefit plans do not fully own ( vest in ) funds contributed on their behalf by the employer until as many as five years of service with that employer have passed. All pension plans are voluntary—that is, employers are not obligated to offer pensions. 

PARTICIPATION, VESTING, ELIGIBILITY, AND SERVICE. Three significant dates and an interval figure in defined-benefit pension plans. 

ACCRUAL OF BENEFITS. Entitlements accrue slowly in defined-benefit pension plans, with most of them coming late in an employee s working lifetime. A representative plot of pension entitlements versus age appears in Figure 8-5. Such a rate tends to keep vested participants working for a single employer for a long time, although the steep rise in pension credits does make early retirements possible. 

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