Although quits and layoffs are influenced by considerations other than investment costs, some of these, such as pension plans, are more strongly related to investments than may appear at first blush. A pension plan with incomplete vesting privileges19 penalizes employees who quit before retirement and thus provides an incentive—often an extremely powerful one—not to quit. At the same time pension plans "insure" firms against quits for they are given a lump sum—the nonvested portion of payments—whenever a worker quits. Insurance is needed for specifically trained employees because their turnover would impose capital losses on firms. Firms can discourage such quits by sharing training costs and the return with employees, but they would have less need to discourage them and would be more willing to pay for training costs if insurance were provided. The effects on the incentive to invest in one's employees may have been a major stimulus to the development of pension plans with incomplete vesting.