Penny Thomas
This is the second post in our new series, based on members’ real questions to us.
I was recently asked, “How can I find out when I will be fully vested in LAGERS?”
To answer this question, we should first understand what “vesting” means. According to The Farlex Financial Dictionary, vesting is “the process by which an employee with a qualified retirement plan becomes entitled to the benefits of ownership . . . Vesting occurs after an employee has worked at the company for a certain number of years; once vesting occurs, the benefits of the plan cannot be revoked.” So, bottom line, as far as LAGERS is concerned, vesting is the amount of time you have to work for a LAGERS employer in order to be guaranteed a monthly benefit for life in retirement. For LAGERS, that amount of time is 5 years or 60 months.
Okay, so when does the vesting period begin? Does it start the with the first paycheck you receive? Does it start after you’ve been assigned your tools and locker? Does it start the first of the month after you begin employment?
As a LAGERS member, you begin your vesting period on the first day you work for a LAGERS employer. So, from that date, you may count out 60 months, and that is when you will be fully vested. Once a member is vested with LAGERS, he/she is guaranteed to receive a benefit whether he/she continues employment with a LAGERS employer until reaching retirement age or terminate and employ outside the LAGERS system.
What if you worked part-time (uncovered by LAGERS) for an employer for a few years and then go full-time (covered by LAGERS)? Would you count the day your started the part-time position or the full-time position? The answer is, you would count your first day of LAGERS covered employment, so the first day of your full-time employment.
Perhaps you are unsure whether you are covered by LAGERS or not. How do you know? Your human resource personnel should be able to tell you. However, just so you know, to be covered, you must work the number of annual hours elected by your employer, either 1,000 hours, 1,250 hours, or 1,500 hours. If you are not sure how many hours your employer has elected, you may ask human resources, or you may give us a call here at LAGERS, and we can let you know.
What if you worked for a LAGERS employer for under 5 years, but you returned to work at a different LAGERS employer after leaving the first? No worries! You can add the time you worked at the first employer to the time you work at your second. Once you hit 60 months combined, you are vested. It becomes a bit trickier to determine your official vesting date, as you must know your start and end date of the first job and the start date of the second. Your vesting period begins on your first day, and in this case, pauses at date of termination, and picks back up the first day of your new position.
Here is a short clip about vesting at LAGERS:
As always, if you ever have any questions or concerns regarding your LAGERS benefit, including vesting, please contact us.
