401ks: How Does Your Employer Match Up?

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My last post got me to thinking – How many companies match 401ks, and how much? My old employer matched 100% up to 6%, with full vesting in 5 years. Here is some 2006 data via a press release from a company called Aon Consulting:

This study also shows that 85 percent of organizations make contributions to employee 401(k), 403(b) and 457 plans to a certain level. In fact, 29 percent of companies offer a 100 percent match on employee contributions, while 7 percent provide a 75 percent match and 39 percent of employers match 50 percent of employee contributions. The level to which companies provide a match varies, based on employee contribution. More than 40 percent of organizations match employee contributions of 6 percent or more of pay, 16 percent match pay contributions between 5 percent and 6 percent, and 18 percent of companies match employee contributions between 4 percent and 5 percent of pay.

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  1. Brandon Smith says

    IBM: 100% up to 6% of income. But only after working for one year (which is reasonable). Fully vested immediately.

  2. My company offers something called Simple IRA with Schwab. I think it is similiar to a 401k, but for small businesses.
    They match 100% up to 3%. That’s exactly the amount I am putting in. 🙂

  3. Confused says

    My company matached 5% after 1 year of service. So does that mean to take full advantage of this I should contribute 5% of my check to the 401 k plan? or more or less? SOrry but I just dont understand it and the material they sent me makes no sense its all a mumbo jumbo

  4. My employer contributes 3% of my pay regardless of whether I contribute or not. However, they don’t match at all.

  5. Just a side note about employer matching funds in 401Ks, don’t let the thought of unvested 401K money keep you in a deadend or dimissal job situation … I’ve had friends “stick it out” just one more year to vest another 20% of their employer matching funds for a 401K in a miserable job. Sometimes you just got to walk away.

  6. The company I work for matches 25% of the total employee contributions. so when I put in $15,000 for the year, they will match a quarter of that, $3750.

    That’s great incentive.

    I heard that Fidelity matches 100% of employee total contributions. Too good to be true?

  7. Awesome information! Thanks for the link. I was actually wondering what constituted a “good” match, and I was thinking it had to be 50% to be considered good, and that 50% was pretty common. My husband just went permanent at his job and they match a measley 10%, but the people that he works with (same level or below him) think that’s good.

    I have the ridiculously unheard-of 2-1 matching. 🙂

  8. My older employer used to match upto $1500 vesting over 4 years! My current employer matches 6% of my salary with instant vesting…which means $150000 (from me) + another 6% of annual salary from the company…I love it.

  9. My company matches 50% of my pay up to 5%.

  10. I fall in that last 18%. My employer, a large company, matches up to 4%. I put in only enough to meet that requirement and fill the rest of my savings into a Roth IRA.

  11. I don’t know a lot about this but if we put in 6%, our employer, Webster University put’s in 9.5%. It’s managed through TIAA-CREF so I’m not sure if it’s a 403(b) or what it really is.


  12. My employer will give me max of 3% on a 4% contribution, immediate vesting.

  13. My company (technology) offers 100% 401K matching up to 6% of my pay. My fiancee’s company (non-profit) offers 35% 403b matching up to 5% of her pay.

    I’ve been taking full advantage of my company match since the beginning, but I’ve got to convince my fiancee of the merits of doing so herself (free money)! She’s 1% shy of getting the full match..

    Maybe I can get her to read your blog 🙂

  14. My employer matches 50% up to 10% of your pay…

  15. I am a college teacher. My employer probably has the best retirement plan. It does not match my 403b, but instead, it contributes 9% of my first $9000 salary income and 15% of any salary income beyond the first $9000 to my retirement account. The beauty is that my employer’s contributions are independent of my 403b contributions even though I have put max into my 403b account. Now I feel like that I get about 100% “match” of my 403b contributions. Oh well, this is probably why the Money magazine recently ranked college professors as the second best profession after software engineers.

  16. Anon E. Mouse says

    My employer doesn’t match any 401k contribution, but contributes up to 12.5% of our salary to a ‘profit sharing’ account, which vests over 5 years.

    However, while the contribution amount has historically been 12.5%, the last several years they have dropped their contribution to 8%.

    The profit sharing account’s investments are directed by the company; it’s a generally conservative mix of stocks and bonds.

  17. My wife’s company contributes 9% of her annual salary regardless of what she contributes. After 3 years of service, the company contributions are fully vested.

    My company matches the first 4% of what i contribute. Fully vested immediately.

  18. Pragmatic Finance says

    The last company I worked for was as bad as your wife’s. I left before I was elible for a 401k but I did inquire a little about it. I think it was along the lines of a 25% match on 4% of your pay or something similar. Not exactly the best in the world but better than no plan. I think it was offered after one year which seems to be pretty standard.

  19. My company provides a 50% match of my contributions up to 6% of my pay. I think this is pretty standard but they also offer immediate 100% vesting and no wait period before they start matching my contributions. They also throw in a profit share every spring roughly equivilent to 1.25% of my annual pay. In the end if I contribute only the 6% of my pay I get an extra 4.25% of my annual pay added to the pot! That’s a lot in my book, an immediate 71% return on investment!

    You know I read recently (I think on MSN Money but could be wrong) that if people would stop thinking about 401k matching as free money and start thinking of it as part of their salaries more people would contribute.

    Think about it from the perspective of the job offer: We’ll hire you at a rate of $50,000 per year…. or, we’ll hire you at the rate of $53,000 per year provided you put $6,000 into your company provided retirement savings account.

    Most people know they should save and more people would I think if the offer was presented this way.

  20. Our employer provides no matching. We get a discrentionary “profit sharing” contribution, which is on a 6 year vesting schedule. My profit sharing contribution was 5%, but I’ll never get close to that 6 year vesting mark before I exhaust my usefullness to this company.

  21. Oh, another cool thing is that we’re switching our 401k plan to one that has a 0% plan expense fee! It can be even more important than the matching.

    See this article:

  22. my company has a 401k (socially responsible funds via calvert, which i like) but 0% matching. i contribute anyway of course.

  23. My company matches 25% of contributions up to 6%, but it’s fully vested immediately.

  24. Personal Finance Blogger says

    100% match up to 5% of salary. Cliff vesting after 3 years (which is July for me.)

  25. Don Marek says

    My only problem with 401k’s is that there is so much variation between companies. At one employer I was able to choose anything from Fidelity to Janus to Oppenheimer to Vanguard.

    At another employer, I only was able to go with American Funds. Not a badly run fund company, but what if it that one went bad either through poor management or allowing too much money to overwhelm a well performing fund.

    Or, what if the fund company is a loser?

    I’m sure some of this can be attributed to the cost and fees involved in offering such a program, so maybe depending on the size of the company, choices might be limited.

    Regarding matching, this is offered voluntarily by the employer, and despite my complaints, I would not want any more government saying what could or could not be offered by an employer. Too bad I can’t take the 7% of medicare and SS and the employer’s contribution and have that as a 401k. We could all probably retire millioniares!

  26. My former company, a small financial consulting company, had no match. I think I was one of a very small handful who contributed. Much of the workplace was international, so they didn’t want their money sitting around in the US.

  27. My company matches 75 cents on the dollar up to 8 percent. So, basically they match 6%. I put away just enough so that my share and theirs equals the maximum $15K per year. I then contribute to a Roth and then just a plain old savings account. I am vested in my contributions and my employers contributions the first day on the job. (There is no vesting period)

    The other plus to my company is that they fully fund a pension for me as well. Hopefully they’ll keep that around long enough for me to take advantage of it.

  28. My wifes genius CEO set up their 401k with a buddy of the CEO. The funds all had a load that varied between 4 and 5%. We opted not to get into the plan.

    As for myself, I have a plan that matched 100% up to the first 6%. A few of the funds have “transaction fees”, which stinks.

  29. Ar1stotle says

    Old company (Large Fortune 1000) = 50% match of contributions up to 4% with immediate vesting using Fidelity.

    New company (Small, > 20 employees in the US) = 0%! BUT they do pay 100% of monthly health care insurance cost + profit sharing after 2 years to offset.

  30. My employer doens’t match in our 457, but instead funds a pension plan. Their contribution to it changes from year to year based on actuarial calculations each year. I think starting in July their amount will be about 9% of earnings. The only problem is the pension vests after 5 years, and I am only half way there. I am happy where I am right now so hopefully that won’t be an issue in the near future.

  31. I also work for a University, but am not a professor. They pay 8.1% of the first $47,450 and 13.3% of whatever you make beyond that.

    For my salary, it equals about 15% contribution regardless of what I put in (as long as I’m contributing the minimum = 1% for under 35, 3% for over).

  32. I’m currently interviewing and I had an employer say they did not offer any matches, but that is pretty much standard now days?!?! This is good to know.

    They did offer a profit sharing based on the company making money, BUT they didn’t make money the past few years because they have been releasing new software.

  33. My employer puts in 8% and I have to put 1% into my 403(b). In otherwords my salary is really 8% higher than quoted and 9% has to go into the 403(b).

  34. Fidelity’s 401k plan for their employees matches $1 for $1 up to 5%. I know this because I work for Fidelity.

  35. Does anyone know if an employer is required to match up to 3% on a bonus for A simple Ira?

  36. My last employer, a very small & young non-profit, did a flat 7% of my gross salary. My new employer, a very large corporation, matches “25% on first 4% of employee contributions.”

  37. Concerned about my familys future??? Help me out here but my employer contributes 6% of the first 15% invested. My math shows that on the dollar, that would be an employer contribution of less than a penny. Should I get out while I still can and find a better employer???

  38. My employer matches 100% up to 7%. I’m with a large oil and gas company.

  39. I am starting a new job where the employer offers instant 100% vesting and for every dollar I put in, the employer contributes $1.35. Oh yeah!

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