An employer experiencing high turnover and seeking to reduce pension cost is likely to prefer:
A) full vesting after three years.
B) full vesting after six years.
C) full vesting after seven years.
D) to offer portability rights.

Question

Quizplus · Accepted Answer

By offering full vesting after three years, the employer may be able to reduce their pension costs by eliminating pensions for employees who would leave before that time. Additionally, offering full vesting after only three years may help to retain employees who are looking for a strong benefits package. Full vesting after six or seven years may be seen as too long of a wait for employees, and offering portability rights may be costly for the employer.

An Employer Experiencing High Turnover and Seeking to Reduce Pension