The current five-year employment requirement for full vesting of pension plans often hurts workers who change jobs, lose their jobs, or who take time out for family care. The government could reform this part of pension plans by

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A shorter vesting period would allow workers to become fully vested in their pension plans sooner, which would benefit those who change jobs frequently, lose their jobs, or take time out for family care. This would provide greater financial security for workers and their families without placing undue burdens on employers. Eliminating vesting periods or mandating partial benefits would be too extreme, while a longer vesting period would only exacerbate the current problem. Therefore, legislating a shorter vesting period is the most practical solution.

The Current Five-Year Employment Requirement for Full Vesting of Pension