EMPLOYER MATCH
A Powerful Tool to Boost Employee Retirement Savings and get business tax benefits
Employer match is one of the most common 401(k) plan features. Simply put, employer match is where an employer matches their employee’s 401(k) contributions.
Benefits of an Employer Match
Many small businesses decide not to match their employee contributions in their 401(k) plans to save on costs. However, there are many benefits for doing an employer match both for your employees and your business.
Tax Benefits
The employer reduces its taxable income and the money grows tax-free in the employee's 401(k) account until it is withdrawn.
Flexibility
You can decide how much you want to match and what the vesting schedule should look like based on what’s best for your business.
More Employees On Track for Retirement
Employee retirement savings can grow quicker with your match.
High-quality Employees
An important feature of a robust benefits package, it helps attract top talent employees, especially with higher matching contributions.
Increased Employee Participation
Get increased employee 401(k) participation by matching your employees' contributions. It encourages employees to save more and often is the extra push they need to participate in their company-sponsored retirement plan.
Successful Annual Testing
Pass your annual 401(k) compliance testing by increasing plan participation rates. An employer match typically increases employee participation rates, making it easier to pass annual non-discrimination testing.
Protect Your Employer Match with a Vesting Schedule
Employer matches are often subject to vesting schedules. Vesting schedules show the time period that an employee has to work for a company before they have access to the employer match dollars. Generally, employer match contributions can grow in a 401(k) account but cannot be withdrawn or rolled over until they’re 100% vested.
