Thanks to vesting schedules, it can take up to 6 years for workers to own their 401(k) match

Companies use different timelines, or vesting schedules, to determine how lengthy it takes for savers to fully own the employer contributions.

In some cases, they must work at a company at least six years in front of the funds are theirs. They risk forfeiting some of the money, and investment earnings, if they walk away first.

A worker retains complete ownership of their match when it is 100% vested. One important note: An employee often fully owns their own contributions.

More than 44% of 401(k) plans offer immediate full vesting of a comrades match, according to the PSCA survey. This means the worker owns the whole match right away, which is the first-rate outcome for savers. That share is up from 40.6% in 2012.

The rest, 56% of 401(k) envisages, use either a “cliff” or “graded” schedule to determine the timeline.

Cliff vesting grants ownership in full after a associated with point. For example, a saver whose 401(k) uses a three-year cliff vesting fully owns the company game after three years of service. However, they get nothing before then.

Graded schedules phase in ownership piecemeal, at set intervals. A saver with a five-year graded schedule owns 20% after year one, 40% after year two and so on until reaching 100% after the fifth year.

For prototype, someone who gets 40% of a $5,000 match can walk away with $2,000 plus 40% of any investment earnings on the go with.

Federal rules require full vesting within six years.

Almost 30% of 401(k) plans use a graded five- or six-year register for their company match, according to the PSCA survey. This formula is most common among small and midsize houses.

Vesting schedules tend to be a function of company culture and the philosophy of executives overseeing the retirement plan, Ellen Lander, predominant and founder of Renaissance Benefit Advisors Group, based in Pearl River, New York, previously told CNBC.

Promote, there are instances in which a worker may become 100% vested regardless of the length of their tenure.

For example, the tax corpus juris requires full vesting once a worker hits “normal retirement age,” as stipulated by the 401(k) plan. For some companies, that may be age 65 or earlier.