ten-year vesting (cliff vesting) Definition | Business Dictionaries from AllBusiness.com
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Business Definition for: ten-year vesting (cliff vesting)
Dictionary of Insurance Terms
ten-year vesting (cliff vesting)

method of vesting under the Employee Retirement Income Security Act of 1974 (ERISA) that requires an employee to have 10 years of service with an employer to be vested. An employee who leaves an employer prior to that time does not receive retirement benefits from that job. Under the tax reform act of 1986 , after December 31, 1988, the 10-year vesting rule is reduced to 5 years.

See also vesting
Related Terms:
vesting

right an employee gradually acquires by length of service at a company to receive employer-contributed benefits, such as payments from a pension fund, profit-sharing plan, or other qualified plan or trust. Employees must be vested 100% after five years of service or at 20% a year starting in the third year and becoming 100% vested after seven years.

Referring Terms:
cliff vesting
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