Jacob participates in his employer's defined benefit plan. He has worked for his employer for four full years. If his employer uses a five-year cliff vesting schedule, Jacob will need to work another year in order to vest in any of his defined benefit plan retirement benefits.

Question

Quizplus · Accepted Answer

Under a five-year cliff vesting schedule, an employee becomes fully vested in the employer's retirement benefits after five years of service. However, if an employee leaves the employer before completing five years of service, they are not entitled to any of the retirement benefits. In Jacob's case, he will need to work one more year to complete the five-year vesting period and be entitled to retirement benefits under the defined benefit plan.

Jacob Participates in His Employer's Defined Benefit Plan