Hello! I'm hoping someone can help me out here. The company I work for sent the employees the below vesting schedule, indicating that we need to work for five years to reach 100% vested status.
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"Do I need to work a certain amount of time to keep my matching contributions and non-elective contributions? Yes, your matching contributions and non-elective contributions will vest as specified below:
• Less than One year of vesting service - 0%
• One year but less than two years of vesting service - 20%
• Two years but less than three years of vesting service - 40%
• Three years but less than four years of vesting service - 60%
• Four years but less than five years of vesting service - 80%
• Five or more years of vesting service - 100%"
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However, when I log onto my 401k servicer platform, all of my account sources state that I am currently 100% vested even though I've only spent four years working here. The sources are employee contributions (100% vested), safe harbor non-elect (100% vested), and profit sharing (100% vested). The latter two are what the employer contributes.
I double checked with a customer service representative and he confirmed that I am 100% vested in all sources, specifically because the "employer match" is actually "profit sharing," meaning that our vesting schedule doesn't apply. He also noted that there is a strong possibility that the leadership/operations team did not submit the paperwork correctly to our 401k servicer so it defaulted to a profit sharing plan.
My question is, has anyone experienced this before? Is there a real difference in profit sharing versus other employer contributions as it relates to vesting? I assume this vesting schedule indicates that it's not a "cliff" type of situation where I'd lose it all after four years? For context, there are several people on my team that feel obligated to stay in their positions even though they are unhappy; many have 2-3 more years before reaching 100% vested status.
Any insight is appreciated! I just want to make the right choice financially and provide guidance for my teammates as well while they negotiate new opportunities.
Submitted August 28, 2024 at 04:53PM by cucumberboots https://ift.tt/yBuHwDP
