'Vesting' as used in retirement plan means ownership. Every employ owns a certain percentage of their account in the plan each year. An employ who is 100% vested in his account own all the money in his account and the employer can not take any part of his money in case he wants to retire. In the question given, Tom is only 80% vested, which means that if he decides to retire today, he is going to forfeit 20% of his retirement plan.
