Employee Benefits | FJG/FYI Articles
Trends in Company Match Contributions
A company match is an important
incentive for attracting qualified employees, increasing participation levels, and most
importantly, helping employees achieve a
necessary asset level for retirement. Some
recent statistics reveal:
Most companies, 77.9%, offer a matching contribution for their employees according to the 2004 DC Survey on PLANSPONSOR.com. With the value that employees place on benefits, your retirement plan can become one of your most important recruitment tools for attracting highquality employees.
Plan participation may increase. According to the Pension Research Council, plans with no match average about 64% participation, whereas those that offer a match tend to see an increase in participation of 5% to 14%, depending on the match formula.
The most common match rate is $.50 per $1.00, which is used by 45.8% of plans. The most common match limit is up to the first 6% of participant contributions, which is used by 29.6% of plans according the PSCA’s 48th Annual Survey of Profit Sharing and 401(k) Plans.
The eligibility for a company match tends to be one of two options, with 35.8% of plans having immediate eligibility, and 36.2% of plans havinga one-year eligibility, according to the PSCA, 401(k) and Profit Sharing Plan Eligibility Survey 2005.
If you have questions about adding or enhancing a company match, please contact your plan consultant.