Employee vs. Employer Contributions
401(k) profit-sharing plans typically include contributions from both the participant (employee) and the plan sponsor (employer). In a divorce, these contributions can be divided in different ways:
- Employee deferrals: These are usually 100% vested and can be divided easily.
- Employer matching/profit-sharing contributions: These may be subject to a vesting schedule. For example, if the participant has been with the company for only a short period, they may not be fully vested in these contributions.
Unvested amounts are typically forfeited if the participant leaves the company. That means the alternate payee may not be entitled to the full balance shown in a statement unless we confirm the participant’s vested percentage. This is why it’s critical to obtain a current participant statement showing both vested and unvested totals.

