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Your employer may use a schedule in which employees are 100 percent vested in employer contributions after 3 years of service (cliff vesting). Under graduated vesting, an employee must be at least 20 percent vested after 2 years, 40 percent after 3 years, 60 percent after 4 years, 80 percent after 5 years, and 100 percent after 6 years. If your automatic enrollment 401(k) plan requires employer contributions, you vest in those contributions after 2 years.
Under the graduated vesting schedule, your employer's contributions are vested over the course of six years. None of the money is vested until you have completed two years of service, at which point 20 percent of your employer's contributions are vested.nder the graduated vesting schedule, your employer's contributions are vested over the course of six years. None of the money is vested until you have completed two years of service, at which point 20 percent of your employer's contributions are vested.