Practice Quiz

Paralegal Exam Prep

Category - Legal Envrmt

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Prior to the enactment of ERISA, what was a common vesting schedule under defined benefit pension plans?
  1. Three-year cliff vesting
  2. Six-year graded vesting
  3. No vesting until age 65
  4. Immediate vesting
  5. Vesting after 5 years of service
Explanation
Answer: C. Prior to the enactment of ERISA, no vesting until age 65 was a common vesting schedule under defined benefit pension plans. The result was that many workers that hadmany years of service with a particular company never received pension benefits. ERISA now requires 100% vesting after 6 years of service.

Category: Legal Environment
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