Employer matching contribution

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Employer matching contribution

The amount, if any, a company contributes on an employee's behalf to the employee's retirement account, usually tied to the employee's own contribution.

Employer Matching Contribution

Money an employer offers to an employee's IRA or other retirement fund. 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.
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By industry, jobs that are high-paying, and that also have generous employer matching contributions, like financial services, tend to have employees that save a higher percentage of their income.
Failure to limit employer matching contributions under IRC section 401 (m)
Among these are the ability to save current federal and state income taxes on pre-tax contributions, receiving "free money" from one's employer through the employer matching contributions, the ability to determine how money in a 401(k) plan is invested, and the ease with which a participant's benefits in a 401(k) plan can be transferred from one plan to another as an employee changes jobs.
In addition, they offer an RRSP program with employer matching contributions.
In a recent paper, Choi, Laibson, and I (7) study a company at which employer matching contributions were originally made in the form of employer stock, but with no restrictions on subsequent diversification.
404(a)(7) are not subject to the tax to the extent that they do not exceed employer matching contributions made to a 401(k) plan.
Employer matching contributions must continue to be made on a pre-tax basis.
Employer matching contributions may be contributed only to the traditional pre-tax accounts.
Generalizing from these results, one might expect that employer matching contributions made in employer stock will stay in employer stock, even if participants are able to immediately diversify out.
You also may lose some retirement benefits in the event that your plan contributions and any employer matching contributions are not deposited before the company files for bankruptcy.
There can be other benefits as well, such as employer matching contributions.

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