Are 401(k) matches disappearing?
November 6, 2008 by Sam NarisiPosted in: Attracting talent, In This Week's E-Newsletter, Latest News & Views, Retention
Help with retirement has always been a key benefit for employees. But in today’s economy, are companies scaling back what they’re willing to offer?
General Motors recently made headlines when it chose to temporarily stop matching employees’ contributions to their 401(k) accounts. The company joined others, such as Goodyear, Frontier Airlines and Entercom, that have done the same.
So far, it’s not a very widespread practice. Only 2% of employers have stopped matching contributions, according to a recent survey by Watson Wyatt. However, an additional 4% are thinking about doing so.
Many experts have warned that cutting retirement benefits can be a bigger morale killer than many realize — especially since it hurts those who are doing the smart thing by saving for retirement despite the economy.
Tags: 401K, employer match, General Motors
November 10th, 2008 at 10:09 am
What is the average employer match in today’s market?
November 10th, 2008 at 1:56 pm
I work for a small family owned manufacturing company. We match 40% up to 6% of an employees deferral. Our employees can contribute up to the current IRS max, but we only match up to the 6%.
November 14th, 2008 at 12:00 pm
WE ARE A SMALL COMPANY TOO. IF THE EMPLOYEE CONTRIBUTES AT LEAST 4%, WE MAX OUT OUR MATCH AT 1%. I THINK THIS IS LOW AND OUTDATED. ANY THOUGHTS? WHAT IS THE AVERAGE MATCH THESE DAYS?
November 17th, 2008 at 12:17 pm
We are a small company as well. We’ve been matching 50% up to the 1st 7% of an employee’s deferral for 10+ years.
December 19th, 2008 at 2:16 pm
We match 100% the first 3% then 50% for the next 2%, anything above that is not matched.