Big Lots 401(k) filing shows graded vesting for employer match

Big Lots workers who leave with a 401(k) balance need to know one number: five years. The Big Lots Savings Plan used graded vesting for employer contributions, which meant less than 2 years of service got 0%, 2 to under 3 years got 25%, 3 to under 4 years got 50%, 4 to under 5 years got 75%, and 5 or more years got 100% ownership of the company match.

That distinction matters because vesting means ownership. The Internal Revenue Service says employee contributions are always 100% vested, but employer money can follow a schedule, and workers who leave before full vesting can forfeit some of that match. In plain terms, not every dollar in a retirement statement is automatically yours the moment it lands there.

The plan filing, dated June 25, 2024, showed how much was at stake. The Big Lots Savings Plan held $333,427,511 in net assets available for benefits at the end of 2023. It also showed $8,596,689 in company matching contributions and $1,945,955 in rollover contributions, a reminder that the account can combine current pay, employer money and money moved in from a previous job.

The bigger mistake for departing workers often comes after the last shift. The IRS says most pre-retirement payments from a retirement plan or IRA can be rolled over into another retirement plan or IRA within 60 days, or transferred directly from one institution to another. A direct rollover, or trustee-to-trustee transfer, avoids withholding tax on the transfer amount. A 60-day rollover can create tax and deadline problems if the window is missed, and the IRS generally does not allow more than one rollover from the same IRA within a 12-month period.

For Big Lots employees, the first move after a layoff, store closure or job change is simple: ask the plan administrator how much is vested and what distribution options are available. That matters even more after Big Lots filed for Chapter 11 bankruptcy in September 2024. A late-December deal would keep 200 to 400 stores open under Variety Wholesalers and could preserve 5,000 to 10,000 jobs, while Big Lots had about 27,700 employees and more than 1,300 stores in 48 states when it filed. In a fast exit, the wrong retirement choice can cost real money long after the last paycheck arrives.