Using Vesting Results

A vesting function result returns a factor that reduces a benefit—for example, .7 if an employee is 70 percent vested. In the benefit formula, you apply the vesting factor to a benefit.

If employees are always fully vested, you don't need to apply the vesting percentage to the benefit formula. However, you may still want to set up a vesting function result so that your employee communications explicitly show that employees are 100 percent vested.

Note: For contributory plans, you don't apply the vesting to the initial benefit. Instead, you use the employee-paid benefit function to determine how much of the benefit is attributable to employee contributions (which are always 100 percent vested). Then you set up a second benefit formula, which subtracts the employee-paid portion from the total benefit to arrive at the employer-paid portion. You use the vesting result within the second benefit formula. After the employer-paid portion is adjusted by applying vesting rules, you may need to set up yet another benefit formula to add back the employee-paid portion.