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Let's say someone works for a company that lets employees contribute to a 401k, and the employer offers a match.

Based on my read of the 2006 Pension Protection Act (beginning on p. 2 of the linked PDF, line 18) and understanding of the term "defined contribution plan", a company that does not offer a "graded" vesting of the plan match must, by law, fully ("cliff") vest that match after three years.

If my interpretation of the law is correct, then let's say, through some oversight, the company is only cliff vesting their matches after the five year mark.

If an employee has no intention of leaving the company but just crossed the three year threshold, what recourse does the employee have, short of suing the company, to make sure she gets the contributions she's entitled to if she's, say, laid off or has to relocate to take care of elderly relatives?

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    I believe them rare, nowadays, but are you absolutely certain that you're on a defined payment plan and not a defined benefit plan (which, per line 5 of that page, seems to have a 5-year cliff)? – TripeHound Sep 4 at 6:59
  • There is no guaranteed-for-life payout or benefit levels based on time worked, only a match. My understanding is that a defined benefit plan is legalese for what most people call a pension in the US. This would not be a pension in that sense, unless there are some legal contortions going on that I'm not aware of. – schadjo Sep 4 at 12:39

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