401K - Vested/Unvested Matched Contributions

Posted by Ira on July 30, 2006, 11:19 am

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Greets,

This seems to be the "Holy Grail" of quicken questions. Lots of
people have asked, no one has answered.

Does anyone know how to enter an employer match into a 401K which is
only partially vested? I my specific case (which I note from all
prior requests is quite common), my employers match vests over time
(20% per year, 100% vested at 5 years). I assume, similar to a prior
post, that should you leave prior to vesting, you forefeit.

I am using Quicken Deluxe 2006.

Thanks!

Posted by Porter Smith on July 30, 2006, 2:08 pm

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> Greets,

> This seems to be the "Holy Grail" of quicken questions. Lots of

> people have asked, no one has answered.

> Does anyone know how to enter an employer match into a 401K which is

> only partially vested? I my specific case (which I note from all

> prior requests is quite common), my employers match vests over time

> (20% per year, 100% vested at 5 years). I assume, similar to a prior

> post, that should you leave prior to vesting, you forefeit.

I'm not sure I understand your situation. When I was in a plan with
partial vesting it worked like this: In year one, for every dollar I put
in the company contributed $.20. In year two, $.40 etc. The amount they
contributed varied, but once they put it in, it was mine.

We got paid biweekly, but the plan bought shares monthly. So every other
Friday I had two cash deposits -- my contribution as part of my regular
paycheck transaction and another transaction for the employer
contribution. Then once a month I recorded the transaction when the plan
bought shares of the mutual funds and my cash balance went to 0.

You imply that the company puts in $1 but you only get to keep $.20 if
you leave after 1 year. What happens to the money that $1 earned? Do you
have to give that back as well? If you have your account split over
multiple funds, do you have to say "My money goes to Fund A and employer
match goes to Fund B?" Suppose the fund you chose lost money so now those
shares you bought with the company's $.80 are only worth $.50. Do you
have to pay them the difference?

Posted by DP on July 30, 2006, 3:17 pm

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>> Greets,

>> This seems to be the "Holy Grail" of quicken questions. Lots of

>> people have asked, no one has answered.

>> Does anyone know how to enter an employer match into a 401K which is

>> only partially vested? I my specific case (which I note from all

>> prior requests is quite common), my employers match vests over time

>> (20% per year, 100% vested at 5 years). I assume, similar to a prior

>> post, that should you leave prior to vesting, you forefeit.

> I'm not sure I understand your situation. When I was in a plan with

> partial vesting it worked like this: In year one, for every dollar I put

> in the company contributed $.20. In year two, $.40 etc. The amount they

> contributed varied, but once they put it in, it was mine.

> We got paid biweekly, but the plan bought shares monthly. So every other

> Friday I had two cash deposits -- my contribution as part of my regular

> paycheck transaction and another transaction for the employer

> contribution. Then once a month I recorded the transaction when the plan

> bought shares of the mutual funds and my cash balance went to 0.

> You imply that the company puts in $1 but you only get to keep $.20 if

> you leave after 1 year. What happens to the money that $1 earned? Do you

> have to give that back as well? If you have your account split over

> multiple funds, do you have to say "My money goes to Fund A and employer

> match goes to Fund B?" Suppose the fund you chose lost money so now those

> shares you bought with the company's $.80 are only worth $.50. Do you

> have to pay them the difference?

This doesnt quite answer the question, but your 401(k) statement probably
shows you how much money is yours and how much is not yet yours because
you're not fully vested. The website too, if the investment company has a
decent website.

Posted by Uncle Fester on July 30, 2006, 3:52 pm

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Porter Smith wrote:

> Ira wrote:

> > Does anyone know how to enter an employer match into a 401K which is

> > only partially vested? I my specific case (which I note from all

> > prior requests is quite common), my employers match vests over time

> > (20% per year, 100% vested at 5 years). .

> I'm not sure I understand your situation. When I was in a plan with

> partial vesting it worked like this: In year one, for every dollar I put

> in the company contributed $.20. In year two, $.40 etc. The amount they

> contributed varied, but once they put it in, it was mine.

I have never heard of a plan that works like that. You're saying that
the degree of matching depends on length of service? Are you sure?
Every plan I've ever been in works exactly like Porter describes. The
amount of match may vary from year to year based on company
performance, but all employees get the same degree of matching (for
example, 75 cents match on every dollar contributed, up to 6% of
salary).

Q05 Deluxe is able to identify 401k contributions by source (e.g.
Employee pre-tax, Employee after-tax, Employer Match). My current plan
custodian (Vanguard) sends transactions to Quicken with that
information included. In the Account Details for my 401k account, I
can enter a Percent Vested. Then in the Account Summary Quicken shows
401k/403b Account Holdings as both Total Value and Est. Vested Value.

Is this what you wanted to know? The Quicken account can only have one
value for Percent Vested - that is, you can't give it your vesting
schedule. That would be nice for planning and forecasting purposes,
but Quicken's planning tools are quite useless anyway.

Posted by DP on July 30, 2006, 5:29 pm

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> Porter Smith wrote:

> I have never heard of a plan that works like that. You're saying that

> the degree of matching depends on length of service? Are you sure?

I think you all are talking about the same thing. I've been 100 percent
vested for more than a decade, so I don't pay close attention to what my
plan says about that. But I don't think it's uncommon for an employer to say
you are not vested 100 percent in the EMPLOYER'S contributions until you've
been there five years. I think that's what the OP is saying. I don't think
he's saying that the extent of the match changes based on longevity.
Of course, the OP can speak for himself, so let's see if he does.