Also known as: rules of 45 · Rule 45
Written by attorneys · grounded in primary & secondary sources — see below
A pension plan vesting schedule under which benefits become fifty percent vested when an employee's age plus years of service equals forty-five. An additional ten percent vests each year for the following five years until full vesting occurs.
Riley Rivera turned forty with six years of service at Redline Automotive. The sum of her age and service reached forty-six. Her pension benefits vested at fifty percent under the rule of 45, with ten percent more vesting each year thereafter.
Ricardo Rojas reached the age-plus-service total of forty-five after eight years at Rhapsody Entertainment. Fifty percent of his benefits vested immediately. Ten percent additional vesting occurred each year for the next five years until he attained full ownership.
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Benefits reach fifty percent vested status once the employee's age combined with years of service equals forty-five. This calculation applies only to employees who have at least five years of service.
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After the fifty percent vesting point, an additional ten percent of benefits vests each year for five years. Full vesting is therefore reached five years after the age-plus-service total hits forty-five.
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Yes. The schedule applies to employees who have five years or more of service when their age and service total reaches forty-five. Shorter service periods do not trigger the initial fifty percent vesting.
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