Vesting: You Can’t Divide What Isn’t Vested
Employer contributions typically become the employee’s property over time, in accordance with a vesting schedule. For example, if the sponsor Moore control systems, Inc.. 401(k) plan uses a five-year graded vesting schedule, an employee would only be entitled to a portion of their employer’s contributions unless fully vested at the time of divorce.
When drafting a QDRO for this plan, it’s essential to confirm what portion of the employer contributions is vested. The alternate payee can only receive a share of fully vested funds—unvested contributions revert back to the plan if the participant leaves employment too early.

