The Federal Reserve Bank of New York is commonly known as the Fed and is headed by Alan Greenspan. The Fed Board of Governors can use one of three strategies to control the interest rates.
1) Instruct the Federal Reserve Bank to buy or sell bonds. The Federal Reserve Bank is the largest holder of U.S. treasury bonds. Buying bonds will inject money into the system (increasing the supply), decreasing the interest rates. Selling bonds will pull money out of the system (decreasing the supply) and increasing interest rates.
2) Adjust the Discount Rate. This is the rate the Federal Reserve Bank charges banks and other lending institutions to borrow funds. The discount rate is the only interest rate controlled directly by the Federal Reserve Bank and the decisions of Alan Greenspan. Lowering this rate indirectly affects market rates in that banks can now borrow short-term money at a lower rate, thus decreasing their cost of funds. This rate is a short-term variable rate. Changes in the discount rate influence short-term rates to the greatest degree but may have only minimal affect on other longer-term interest rates.
3) Increase the reserve requirement of banks. If the Federal Reserve requires banks to increase the amount of money that they have to keep in reserve, then it is not available to lend. As a result there is a decrease in the supply of money and an increase in price (interest rate). This method of influence is rarely used because of the severe affect on the economy.
A vesting schedule is a time-line that shows the percentage of your company contribution account that you are eligible to receive after a specified number of years of service.
What does it mean to be fully vested?
To be fully vested means that when you leave your company, you are entitled to receive all of the money that the company has contributed to your account and any earnings on that money. (Note: You are always fully vested in the money you contribute to the plan and any earnings on that money.)
What if I leave my company before I am fully vested?
If you leave your company before you are fully vested, then you will receive only the vested percentage of your company contribution account. For example, if you are 20% vested, you will receive 20% of the amount in your company contribution account. The percentage is based on the plan's vesting schedule.
