ack... vesting period sucks...

[andylawcc]

Our company's 401k policy goes like this:

After the 1st year of employment, you are qualify for 401k. Company will match 50% of your paycheck (which I heard is marvelous by industry standard), whereby you can only contribute 10% of. So, the vesting period goes like:

You get nothing (company's contribution to your portfolio) back from Year 1 ? Year 2.
20% at Year 2
40% at Year 3
60% at Year 4
80% at Year 5
100% at Year 6 and thereafter.


[add] no, I am not really complaining..[/]

 

[her209]

100% at 5 years

 

[kranky]

That is a pretty decent vesting policy.

 

[Cattlegod]

dude, what do you do and what company do you work for???

we get 0% matching at my work.

 

[spidey07]

match 100% up to 6%

fully vested after 5 years.

Think about it. why would your employer give you free money and not get something back in return?

-edit-
oh, and your employer really should match 100%. Otherwise it isn't all that attractive/good.

 

[fs5]

4 year vesting of options. (startup)

 

[JRich]

100% match up to 5% and I believe I'm fully vested in 5 years.

 

[altonb1]

100% vested, but only 50% matching UP TO 6%. So...you put in 6%, then match with an additional 3%. No deferred vesting.

 

[andylawcc]

Originally posted by: kranky
That is a pretty decent vesting policy.

Originally posted by: Cattlegod
dude, what do you do and what company do you work for???
we get 0% matching at my work.

Originally posted by: spidey07
oh, and your employer really should match 100%. Otherwise it isn't all that attractive/good.

so it's good or not?

I am not really complaining here, I mean every company wants to find a way to retain employees and I think vesting period is one way to do it.

 

[route66]

100% over 5 years.

But my company doesn't match. Instead there is a 20% bonus on each paycheck that is added to my IRA.

 

[route66]

Originally posted by: andylawcc
so it's good or not?

50% is par for the course.

 

[spidey07]

IMHO, the vesting period is OK. but coupled with a poor match = overall not very good.

That's the weird thing with compensation - it's a total package, salary only being part of it. To me a good 401k package is match 100%, 5-10%, vesting period of 4-5 years. IMHO this is the norm for companies that want to retain their employees.

<---not an HR guy.

 

[MazerRackham]

50% matching up to 8% of my own contribution (I put in 8%, my company puts in 4%). However, we are 100% vested after 1 year. The company match never exceeds 4%, but I can contribute up to 25% of my salary now, and I believe much more later (not sure how many years I need to be here).

 

[andylawcc]

Originally posted by: spidey07
IMHO, the vesting period is OK. but coupled with a poor match = overall not very good.

so a 6-year vest 'requires' a 50-100% match to = good overall policy?

 

[FoBoT]

our vesting is similar to that
but i have been with them 8 years, so i am good to go

our match is 1:1 up to 6% 🙂

 

[spidey07]

Originally posted by: andylawcc

Originally posted by: spidey07
IMHO, the vesting period is OK. but coupled with a poor match = overall not very good.

so a 6-year vest 'requires' a 50-100% match to = good overall policy?

In my opinion, yes. at 6 years it had better be 100% match and a sizable percentage of income. Just my opinion. I think 6 years is a little too long. For that vesting period I would expect a 100% match for 7-10%. There are smart people out there (accountants) that can figure out the break-point and compute the overall value of compensation. I am not one of them.

 

[Midlander]

Originally posted by: altonb1
100% vested, but only 50% matching UP TO 6%. So...you put in 6%, then match with an additional 3%. No deferred vesting.

Same with my company. They also give you 1%.

 

[GhettoFob]

100% matching up to 6%, no vesting period

 

[andylawcc]

Originally posted by: spidey07
In my opinion, yes. at 6 years it had better be 100% match and a sizable percentage of income. Just my opinion. I think 6 years is a little too long. For that vesting period I would expect a 100% match for 7-10%.

so, in reverse, if it was like at 4th or 5th year to get the full amount, a 50%-match would be adequate? Or rather, at what year would be a 50%-match be reasonable?

 

[erub]

Originally posted by: GhettoFob
100% matching up to 6%, no vesting period

the best posted, the company i interned with was 100% matching up to 5%, no vesting period..even let the interns have a 401k (and keep it active as long as over 1K was in there at separation)

 

[spidey07]

Originally posted by: andylawcc

Originally posted by: spidey07
In my opinion, yes. at 6 years it had better be 100% match and a sizable percentage of income. Just my opinion. I think 6 years is a little too long. For that vesting period I would expect a 100% match for 7-10%.

so, in reverse, if it was like at 4th or 5th year to get the full amount, a 50%-match would be adequate? Or rather, at what year would be a 50%-match be reasonable?

I don't really know. It all ties into overall compensation. So you'd have to run the numbers at the 1, 3, 5, 10 year mark to see what is going on.

In my gut, at a 50% match 2 year vesting period would be ok.

Maybe there is some information out there on fortune 50/100/500 companies and the structure of their 401k? In general larger companies have better french benefits.

 

[andylawcc]

okay, thanks spidey

 

[Feldenak]

Fully vested after 1 year.

 

[spidey07]

Originally posted by: andylawcc
okay, thanks spidey

heh, while we're at it look at your pension and see how that works.

my approach is "I must retire on my own regardless of my 401k/IRA/pension/SS/other investments"

that way, all the french benefits are gravy.

 

[kranky]

Originally posted by: spidey07

Originally posted by: andylawcc

Originally posted by: spidey07
IMHO, the vesting period is OK. but coupled with a poor match = overall not very good.

so a 6-year vest 'requires' a 50-100% match to = good overall policy?

In my opinion, yes. at 6 years it had better be 100% match and a sizable percentage of income. Just my opinion. I think 6 years is a little too long. For that vesting period I would expect a 100% match for 7-10%. There are smart people out there (accountants) that can figure out the break-point and compute the overall value of compensation. I am not one of them.

I would be very surprised if there are even ten large companies which offer what you think is a good policy.

My company is very sensitive to maintaining a competitive policy since we have a lot of engineers who can go elsewhere for work. We match 50% up to 6% of salary with a 5-year vesting period. You can contribute more than 6% but there is no matching beyond 6%. If we were out of touch with the mainstream, we'd hear about it.