Which of the following statements regarding vesting in a defined benefit plan is correct?
A)Under a cliff vesting schedule, a portion of an employee's benefits vests each year.
B)Under a graded vesting schedule, an employee's entire benefit vests all at the same time.
C)When an employee's benefits vest, she is entitled to participate in the employer's defined benefit plan.
D)When an employee's benefits vest, she is legally entitled to receive the vested benefits.

Question

Quizplus · Accepted Answer

When an employee's benefits vest, she is legally entitled to receive the vested benefits. Vesting refers to the employee's ownership of the benefits in a defined benefit plan. Cliff vesting and graded vesting refer to the schedule of when the benefits vest, but the legal entitlement to receive the vested benefits is the same in both cases. Participation in the defined benefit plan is not contingent on vesting, but rather on the terms of the plan and eligibility requirements.

Which of the Following Statements Regarding Vesting in a Defined