Question

Axe company sponsors a 401(k) profit sharing plan with no employer match, but the company did make noncontributory employer contributions because the plan was top-heavy. Jack quit today after six years working for Axe and has come to you to determine how much of his retirement balance he can take with him. The plan uses the least generous graduated vesting schedule available. What is Jack’s vested account balance if he has been a participant for 57 months

Answer 1

$30,000

Step-by-step explanation:

Given the following information:

Employer Contributions = $9,000

Employee Contributions = $12,000

Earnings = $4,000 + $5,000

Jack should be given 100% of his contributions and the earnings of those contributions due to the vesting schedule, which he is entitled to because he has only worked for 6 years.