Vesting Computation Periods

If the plan does not provide for full and immediate vesting, determine the initial vesting computation period. 

Commentary: Vesting computation periods are generally 12-month periods that count the years of service to determine vesting. Choices typically are: 

• the plan year; 
• the 12 months measured from the date of hire and anniversaries thereof; or
• the 12-month measure from the date of hire and then subsequently measured on the plan year beginning on the Jan. 1 that occurred before the end of the initial 12-month period.

Editor’s Note: This tip is taken from the “Checklist for establishing, amending, and restating a 403(b) plan NTSA Advisor” that appears in the “Administration Basics Non-ERISA 403(b) for Public Schools” section of the 403(b) Plan Sponsor Guide. 

The 403(b) Plan Sponsor Guide is part of the NTSA Certified Retirement Education Specialist (CRES) materials. The NTSA Certified Retirement Education Specialist (CRES) program and designation has been developed in order to equip advisors to be qualified and available to teach the NTSA educational program, which is designed to provide teachers with the basics of planning for retirement and improve their retirement readiness. More information about CRES is available here.