1. Employee and Employer Contributions
In dividing the Holly Poultry, Inc.. 401(k) Plan, one of the first questions is how to divide contributions. Employee contributions are always 100% vested, so they are usually divided without issue. However, employer contributions may be subject to a vesting schedule. If a participant leaves employment before becoming fully vested, a portion of the employer contributions may be forfeited and therefore not available to the alternate payee.
When drafting the division language, we often recommend using phrasing like “100% of the vested balance as of the division date,” to avoid giving away unvested amounts the participant may never receive.

