Employer Match is a benefit that some companies offer to their employees who sign up for the company’s 401 (k) plan. In essence, the company agrees to top up an employee’s contributions to their plan account up to a certain percentage of each paycheck. Companies are offering this as a perk to attract quality employees and keep them happy.
There are a number of ways the Employer Match can work. The simplest is a straight dollar for dollar match.
Let’s say an employee earns $ 1,000 per pay period and saves 3%. That equates to a savings of $ 30. If the employer offered a 3% adjustment, the company would also contribute $ 30, saving a total of $ 60 per pay period.
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A match can also be more complex. For example, an employer may offer a 50 cents on the dollar match. Let’s say a company is offering $ 0.50 per dollar up to 10%.
An attendee earns $ 1,000 per billing cycle and saves 10%, which is equal to $ 100 per billing cycle. With this match, the company would contribute $ 50 for a total savings of $ 150. This match style is often used to encourage employees to save more without committing the company to an unsustainable match.
An employer match can also have a vesting date. This means that you have to work for a company for a certain period of time in order to keep the money given to you from the game. If you leave before this period, you can keep the money you deposited but not your employer’s money.
