Business and Personal Finance Dictionary

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• VESTING
  
  If you are part of an employer pension plan or participate in an employer-sponsored retirement plan, such as a 401(k), you become fully vested-or entitled to the contributions your employer has made to the plan, including matching and discretionary contributions-after a certain period of service with the company. If you leave your job before becoming fully vested, you forfeit all or part of your employer-paid benefits. If you become entitled to full benefits gradually over several years, this process is called graded vesting. But if your benefits become payable only after a specified number of years of service, and you forfeit all employer-paid benefits if your employment ends before this waiting period is up, the process is called cliff vesting.
  
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