When participants earn benefits in a defined benefit (DB) plan, they can also earn the permanent legal right to those benefits in the future after achieving certain milestones—a concept known as “vesting.” This article, first published on the website of the American Society of Pension Professionals and Actuaries, discusses:
- Rights to benefits under a qualified U.S. DB plan
- The main purposes for which vested benefits are calculated
- Information under Accounting Standard of Practice (ASOP) 4
- Vesting rules by the Pension Guaranty Benefit Corporation
- Vested liability calculation examples
- Vested and total liability calculations