Vesting schedules can also be designed so that only years of service beginning with the effective date of the plan or all years of service are counted. Employees do not have to be fully vested before having completed six, or in some cases seven, years of credited service. When an employee leaves, his or her non-vested benefit is forfeited, thereby decreasing the amount of future employer contributions.

The following Table 1 presents illustrative annual Defined Benefit Pension Plan contribution amounts to fund future benefits for participants at selected ages, and compares them with the maximum annual contribution that may be made under a Profit Sharing Plan. Contributions to a defined benefit plan are not directly allocated to the Participant and Plan assets are pooled and used to pay all plan benefits.

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