An employer match is often described as free money. It becomes the employee's money only once vesting conditions are satisfied, and that condition is doing real work for the employer.
Employee and employer money are treated differently
Contributions an employee makes from their own pay are theirs immediately and cannot be forfeited under any circumstances.
Employer contributions are subject to a vesting schedule, meaning ownership transfers according to service rather than on deposit.
Both sit in the same account and both are invested identically, so the balance shown does not distinguish between vested and unvested money without checking.
Schedules come in two basic shapes
A cliff schedule vests nothing until a service milestone is reached, at which point the entire employer balance becomes the employee's at once.
A graded schedule vests a rising proportion each year until it reaches full ownership, so departure at any point leaves part of the balance behind.
Which shape applies, and over how many years, is set by the plan document within limits established by pension legislation.
Retention is the purpose the design serves
An unvested balance is a cost of leaving that grows with tenure and disappears the moment vesting completes.
That gives the employer a benefit that improves retention among newer staff without any additional cash outlay for those who depart.
It also explains why safe harbour plan designs, which require immediate vesting, are adopted for compliance reasons rather than generosity.
Forfeited amounts return to the plan
When an employee leaves before vesting, the unvested portion is forfeited and generally used to offset future employer contributions or plan expenses.
The money does not vanish; it reduces what the employer must contribute for remaining participants in later periods.
This is why plans track vesting service carefully and why disputes over service credit have real financial consequences on both sides.
Vesting should inform the timing of a move
Someone approaching a cliff date is walking away from a defined sum by resigning shortly before it, and the amount is knowable in advance.
Service is usually measured in plan years rather than calendar months, so the relevant date is not always the employment anniversary.
Rules on maximum permitted schedules and on how service is counted are set by legislation and by each plan's terms, so the plan summary is the document that governs.