BROWSE

Unconditional Vesting

What is 'Unconditional Vesting'

Pension benefits that are entitled to the employee without any restrictions. The employee is fully entitled to the vested benefits, even if he or she chooses to withdraw plan contributions.


This is opposite to conditional vesting, in which entitlement to vested benefits is contingent upon the plan participant's contributions being retained in the plan and not withdrawn.

Explaining 'Unconditional Vesting'

Since a company uses pensions as a tool for long-term retention of employees, its entitlement to present or future pension benefits is contingent upon continued employment with the company for a specified period. Once this condition is satisfied, the pension benefits vest unconditionally with the employee.


Further Reading


Incentive effects of performance-vested stock options
papers.ssrn.com [PDF]
… to Ramsey by incorporating self-interested governments influenced by vested interests … recipient governments' incentives and policies even if they are granted unconditionally … a simple diagrammatic representation of conditional and unconditional economic assistance programs …

The Economic Benefit Doctrine: How an Unconditional Right to a Future Benefit Can Cause a Current Tax DetrimentThe Economic Benefit Doctrine: How an Unconditional Right to a Future Benefit Can Cause a Current Tax Detriment
heinonline.org [PDF]
… to Ramsey by incorporating self-interested governments influenced by vested interests … recipient governments' incentives and policies even if they are granted unconditionally … a simple diagrammatic representation of conditional and unconditional economic assistance programs …

Managerial self-interest and strategic repurchases: Evidence from equity vesting schedulesManagerial self-interest and strategic repurchases: Evidence from equity vesting schedules
papers.ssrn.com [PDF]
… to Ramsey by incorporating self-interested governments influenced by vested interests … recipient governments' incentives and policies even if they are granted unconditionally … a simple diagrammatic representation of conditional and unconditional economic assistance programs …

Cost-efficient performance-vesting equityCost-efficient performance-vesting equity
www.sciencedirect.com [PDF]
… to Ramsey by incorporating self-interested governments influenced by vested interests … recipient governments' incentives and policies even if they are granted unconditionally … a simple diagrammatic representation of conditional and unconditional economic assistance programs …

Equity vesting and investmentEquity vesting and investment
academic.oup.com [PDF]
… to Ramsey by incorporating self-interested governments influenced by vested interests … recipient governments' incentives and policies even if they are granted unconditionally … a simple diagrammatic representation of conditional and unconditional economic assistance programs …

Equity vesting and managerial myopiaEquity vesting and managerial myopia
papers.ssrn.com [PDF]
… to Ramsey by incorporating self-interested governments influenced by vested interests … recipient governments' incentives and policies even if they are granted unconditionally … a simple diagrammatic representation of conditional and unconditional economic assistance programs …

Attitude strength and vested interestAttitude strength and vested interest
books.google.com [PDF]
… to Ramsey by incorporating self-interested governments influenced by vested interests … recipient governments' incentives and policies even if they are granted unconditionally … a simple diagrammatic representation of conditional and unconditional economic assistance programs …

The long-term consequences of short-term incentivesThe long-term consequences of short-term incentives
papers.ssrn.com [PDF]
… to Ramsey by incorporating self-interested governments influenced by vested interests … recipient governments' incentives and policies even if they are granted unconditionally … a simple diagrammatic representation of conditional and unconditional economic assistance programs …



Q&A About Unconditional Vesting


Who has a vested right to an asset?

One has a vested right to an asset that cannot be taken away by any third party, even though one may not yet possess the asset.

How are pension benefits usually contingent upon continued employment with a company?

Pension benefits are usually contingent upon continued employment with a company for a specified period.

What happens if you die within 6 days of inheriting an estate?

If this happens, then you do not inherit anything because your right was not fully vested at the time of death. Your share will instead go to someone else who died after more than 6 days but before more than 12 months had passed since their death date. This is done to avoid disputes over inheritance shares among heirs who have died close together in time (within 6 days).

When do pension benefits become unconditionally vested?

Once this condition is satisfied, the pension benefits will be unconditionally vested with the employee.

What is the opposite of conditional vesting?

Unconditional vesting.

What does vesting mean?

Vesting is the point in time when rights and interests arising from ownership of a property are acquired by some person.

When can you transfer your interest in something?

When your interest is vested, it can be transferred.

How do you acquire rights and interests in something?

You acquire rights and interests through vesting.

What does unconditional vesting mean?

It means that an employee is entitled to vested benefits without any restrictions.