Vesting disputes are date fights: the plan document defines the vesting date, not your anniversary. The audit checks the schedule, the cliff, the acceleration window, and the separation label.
The Audit Set
- Plan document: the graded/cliff schedule with the exact vesting date and forfeiture language; the base rules are in the vesting guide.
- Separation date: forfeiture follows the last working day, and layoff packages can accelerate — the ask is in the severance scripts guide and the 280G side in the 280G guide.
- Break in service: long breaks re-grade vesting; the return rules are in the service break guide, and transfer continuity in the transfer vesting guide.
401(k) disputes go through ERISA claims: keep the plan summary, benefit statements, and the separation letter. The equity side is in the equity vesting guide, and the 409A trail in the 409A guide. The exit calendar is in the exit calendar.
Put the rule into action
Write the letter with the free Severance Package Negotiation Letter generator. The state pages carry the local payout and notice windows, and the application tracker keeps the follow-up date in writing.
Put the rule into action
Four schedules, four exit outcomes
Vesting decides what you keep, and the schedule shape decides when leaving costs you money.
- 401(k) match: your own contributions are always yours. Employer match vests either graded (typically 20% per year starting at year 2) or cliff (0% until year 3, then 100%). Unvested match returns to the plan when you leave.
- Cliff schedules: nothing vests until one anniversary, usually year three; federal minimum standards keep a cliff inside five years, and plan documents can be faster. Resigning two weeks before the cliff forfeits the entire employer match.
- RSUs: shares vest on a schedule and become taxable income at vesting. Termination usually stops future vesting; some plans accelerate on death, retirement or a change of control.
- Options: vesting makes shares exercisable, and the post-termination exercise window sets the tax year. Qualified options have had that window lengthened by law; non-qualified plans set their own.
Run your own dates through the vesting and cliff calculator, which prints the vest dates and the cliff from your hire date and schedule. Read the cliff-vesting entry before you set a last day near a cliff date.
The audit, in five documents
Most vesting losses are record problems, not rule problems. Audit these five items before your last day:
- The service start date the plan uses, not the date on your badge. Clock changes, transfers and acquisitions reset service credit more often than the plan text says.
- The schedule and the vest dates, in writing, per award. A summary sentence is not a schedule.
- The break-in-service rule: a gap can restart the vesting clock in some plans.
- The post-termination exercise window for options, with the deadline date.
- The forfeiture clause and any change-of-control acceleration trigger.
Ask HR for the per-award statement with dates. If the numbers disagree with your own calculation, send the difference in writing before the last day; after the last day you are disputing a record instead of correcting one. The 401(k) vesting entry covers the graded versus cliff distinction, and break-in-service rules covers the restart trap.
Timing the last day against the vest date
If a vest date falls inside your notice window, the last working day is a money decision. Staying two extra weeks can be worth an entire year of match or an RSU tranche; leaving early forfeits it. Do the arithmetic before you announce a date, not after:
- Compare vested value at the vest date versus at your planned last day using the vesting calculator.
- Check whether a layoff or a termination changes the outcome: some plans accelerate on involuntary separation, others do not.
- Check the exercise window cost: exercising options before leaving can be the expensive path if the window is short, because the tax hits at exercise.
For equity-heavy packages, the tax year matters as much as the value: RSUs are income at vest, and options differ between incentive and non-qualified treatment. See stock options and AMT and the equity vesting entry.
Scripts and wording
"Please confirm in writing, per award: the vesting schedule, each vest date, the service start date the plan uses, the break-in-service rule, and the post-termination exercise window with its deadline. My own calculation shows [X] vesting on [date]; please confirm or correct it."
Send it before your last day and keep the reply. Vesting disputes are decided by the plan record, and a dated written correction to that record is the only thing that changes the outcome.
Audit Items And The Record That Proves Each
| Audit Item | Document To Pull | Why It Decides The Outcome |
|---|
| Service start date | The plan record, not the badge date | Clock changes, transfers and acquisitions reset service credit |
|---|
| Schedule and vest dates | A per-award statement with dates | A summary sentence is not a schedule |
|---|
| Break-in-service rule | The plan document text | A gap can restart the vesting clock in some plans |
|---|
| Post-termination exercise window | The option plan text and the deadline date | The window sets the tax year |
|---|
| Forfeiture and acceleration clauses | Plan text plus the layoff package | Unvested money returns to the plan unless accelerated |
|---|
| Loan or offset balance | The latest benefit statement and the offset date | An offset can be reported as a distribution |
|---|
| Last day against the next vest date | Calculator output plus your notice window | Staying past a vest date can be worth a full tranche |
|---|
For the current text behind these numbers, start with the California job exit rules page and the New York job exit rules page, along with the severance layoff math guide hub. Those sources state the rule in full; this page only points at them.
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Frequently Asked Questions
- Do I lose my 401(k) when I leave?
- No. Your own contributions are always 100% vested. Only unvested employer match is forfeited, and it returns to the plan. Check the schedule shape (graded or cliff) and your vest dates in the vesting calculator, and ask for the per-award statement in writing.
- Should I time my last day to a vest date?
- Yes, if the date falls inside your notice window. A cliff that lands two weeks after your last working day forfeits the whole employer match; an RSU tranche on the same date is one vest event away. Run both scenarios before you announce the date, and confirm the plan's treatment of involuntary separation.
- What is the post-termination exercise window?
- The period after you leave in which vested options remain exercisable. It sets your tax year, and a short window can force an exercise you did not plan. Non-qualified plans set their own terms; qualified options have had the window lengthened by law. Get the deadline date in writing before your last day.
- Can an acquisition change my vesting?
- Yes. Change-of-control clauses can accelerate vesting, and acquisitions frequently reset the service start date used by the plan. Read the acceleration trigger and the service-credit language before you assume the schedule on your offer letter still applies. See equity in a layoff week.
Sources (official record — verify before filing)
IRS — tax guidance