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

Question

Quizplus · Accepted Answer

Vesting in a defined benefit plan means that an employee has earned the right to receive certain benefits from the plan. When an employee's benefits vest, she is legally entitled to receive the vested benefits. This does not necessarily mean she is entitled to participate in the plan (as she may already be a participant), and under different vesting schedules, not all benefits may vest at once, as in the case of a cliff vesting schedule or a graded vesting schedule.

Which of the Following Statements Regarding Vesting in a Defined