Matching contribution

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Matching Contribution

Money an employer offers to an employee's IRA or other retirement plan. Normally employers will offer an equal amount that the employee contributes up to a certain dollar amount or percentage of income. This is considered an employee benefit and allows a worker to save more (and accrue applicable interest) without enduring financial hardship.

Matching contribution.

A matching contribution is money your employer adds to your retirement savings account, such as a 401(k) or a SIMPLE.

It's usually a percentage of the amount you contribute up to a cap that the employer sets, such as 50% of your contribution up to 5% of your salary. The matching amount and any earnings are tax deferred until you withdraw them from your account.

In most plans, employers are not required to match contributions, but may do so if they wish. Employers also determine, within federal guidelines, how long you have to work for the company in order to be fully vested in the matching contributions.

References in periodicals archive ?
Under Notice 98-52, the rate at which a participant receives matching contributions was determined by taking into account contributions and compensation for the entire plan year.
Nearly 12 million eligible American workers don't participate in their company's 401(k) plans, or don't invest enough, to take full advantage of free matching contributions from their employers -- typically 50 cents on every 1 invested.
defined benefit pension plans effective December 31, 2006, and will significantly increase matching contributions to its defined contribution savings plan beginning January 1, 2007.
Similar testing (average contribution percentage (ACP) test) and corrections were required for employer matching contributions and employee nondeductible (after-tax) contributions.
Satisfy the nondiscrimination requirements under section 403(b)(12), including a failure to satisfy the nondiscrimination requirements for matching contributions and to offer the opportunity to make salary reduction contributions universally.
It also encouraged other companies and organizations to join it by providing their own matching contributions.
The article mentioned that the company pays more than 90 percent of health-care premiums and offers matching contributions to 401(k) plans, life insurance, paid family leave, tuition assistance and professional development opportunities.
401(m) matching contributions and qualified nonelective contributions can be used in determining the non-HCEs' ADP or ACP for nondiscrimination testing.
For example, matching contributions to a plan for a partner's benefit are considered CODA contributions under the regulations if the partners directly or indirectly allow their contributions to vary.
Alternatively, a check can be sent to the American Red Cross Rural Flood Relief, Monsanto Matching Contributions, P.
The total of incremental wages paid, bonuses, matching contributions, and a newly established Hurricane Relief Fund amounts to more than $700,000.
40(k) plan providing elective contributions, employee and matching contributions and nonelective contributions is treated as three separate plans for coverage testing purposes.