Unconditional Vesting


DEFINITION of 'Unconditional Vesting'

Pension benefits that are entitled to the employee without any restrictions. The employee is fully entitled to the vested benefits, even if he or she chooses to withdraw plan contributions.

This is opposite to conditional vesting, in which entitlement to vested benefits is contingent upon the plan participant's contributions being retained in the plan and not withdrawn.

BREAKING DOWN 'Unconditional Vesting'

Since a company uses pensions as a tool for long-term retention of employees, its entitlement to present or future pension benefits is contingent upon continued employment with the company for a specified period. Once this condition is satisfied, the pension benefits vest unconditionally with the employee.

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  1. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  2. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  3. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>
  4. Are catch-up contributions included in the 415 limit?

    Unlike regular employee deferrals, catch-up contributions are not included in the 415 limit. While there is an annual limit ... Read Full Answer >>
  5. Can catch-up contributions be matched?

    Depending on the terms of your plan, catch-up contributions you make to 401(k)s or other qualified retirement savings plans ... Read Full Answer >>
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    Though the Internal Revenue Service (IRS) carefully scrutinizes the contributions of highly compensated employees (HCEs) ... Read Full Answer >>

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