How do you properly determine a participants vested percentage?

[Guest Dan Kutzke]

I have recently attended a 401(k) seminar and was told that a participant was considered to be vested a year if she/he worked 1000 hours or more during his/her plan year. Does anyone know if this is the correct way of determining a participants vested percentage? Or is it determined by the hire date and term date-a year being 365 days employed at the business?

[david rigby]

No single answer. The first thing to do is see what the plan document says.

Most documents use one of the two most common sets of definitions:

1. One year of vesting service for each plan year in which the EE works at least 1000 hours.

2. One year of vesting service for each plan year in which the EE is employed on both the first and last day of the plan year.

Have I oversimplified too much?

[Guest Dan Kutzke]

Pax-Thank you for your reply-we will check the Plan Document

to see what it has to say about it. Allyson-AA