At what point does an employee become fully vested under a typical Graded Vesting schedule?

In a typical Graded Vesting schedule, an employee becomes fully vested after a specified number of years of service, which allows them to retain a full share of benefits, such as employer contributions to a retirement plan. In this context, vesting typically increases incrementally over time.

Under a Graded Vesting schedule, employees usually reach full vesting, which often occurs around six years of service. This means that the employee will gradually gain ownership of the employer's contributions to their retirement account, starting with a small percentage and increasing until they reach 100% ownership after the defined period, which is commonly set at six years.

For example, an employee may be vested at 20% after two years, 40% after three, 60% after four, 80% after five, and finally 100% after six years. This structure encourages employee retention while providing a clear timeline for when they can claim their full benefits. Keep in mind that different employers may have different plans, but the six-year mark is frequent in Graded Vesting schedules, marking the transition to full ownership of retirement benefits.