Which vesting pattern provides full vesting after a specified service period with no gradual vesting?

Which vesting pattern provides full vesting after a specified service period with no gradual vesting?

• A. Immediate vesting
• B. Graded vesting
• C. Cliff vesting
• D. Step-vesting

Answer: (C)

Cliff vesting is the pattern where you become fully vested after a set period of service, with no vesting before that point. The schedule establishes a specific cliff length (for example, three or five years); before reaching the cliff, you have 0% vesting, and once you hit the cliff, you are 100% vested and remain so thereafter. This contrasts with immediate vesting, where you’re vested from the start, and with graded/step vesting, where vesting accrues gradually over time. The cliff approach is used to motivate staying with the employer long enough to reach the specified period.

Cliff vesting is the pattern where you become fully vested after a set period of service, with no vesting before that point. The schedule establishes a specific cliff length (for example, three or five years); before reaching the cliff, you have 0% vesting, and once you hit the cliff, you are 100% vested and remain so thereafter. This contrasts with immediate vesting, where you’re vested from the start, and with graded/step vesting, where vesting accrues gradually over time. The cliff approach is used to motivate staying with the employer long enough to reach the specified period.