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to vested benefits is contingent upon the plan participant's contributions being retained in the plan and not withdrawn.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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