What term describes the process by which a retirement benefit becomes nonforfeitable?

The term that describes the process by which a retirement benefit becomes nonforfeitable is vesting. Vesting is a crucial aspect of retirement plans, as it signifies the point at which employees earn the right to keep their accrued benefits, even if they leave the company or cease employment.

In practice, vesting typically applies to employer contributions to retirement plans, such as 401(k) plans. Employees may have immediate ownership of their contributions, but employer contributions often have a vesting schedule that outlines how many years of service are required before the employee gains full rights to those funds. Once an employee is fully vested, they cannot lose their retirement benefits regardless of employment status.

Funding refers to the financial backing provided to a retirement plan or other benefits, but it does not address the timing of when employees become entitled to those benefits. Eligibility pertains to the conditions that allow an employee to participate in a retirement plan, which does not pertain to the concept of nonforfeiture. Accrual refers to the process of employees earning benefits over time, but it also does not specifically denote the transition to nonforfeitable status. Therefore, vesting is the correct term that encapsulates the process of becoming entitled to retirement benefits in a way that they