Enhancing the 401(k) plan design by moving to auto-enrollment for employee contributions and immediate eligibility for, and vesting in,
employer matching contributions.
NetJets workers are also eligible for
employer matching contributions if they direct some or all of their bonus into their 401(k) accounts.
Plans with fiduciary advisers are substantially more likely to have
employer matching contributions.
Failure to make
employer matching contributions to all the appropriate employees;
If this second option is elected, no
employer matching contributions are allowed.
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.
Participants do not pay tax on any investment earnings inside their 401(k) account or on
employer matching contributions.
In addition, they offer an RRSP program with
employer matching contributions.
In 2010, Deloitte said there was an increase in plan sponsors offering
employer matching contributions (66%) from 2009 (59%).
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employer matching contributions were originally made in the form of employer stock, but with no restrictions on subsequent diversification.
Berkley says
employer matching contributions are the key to ensuring that employees fund HSAs.
Automatic elective contributions and related
employer matching contributions are, absent contrary affirmative election, invested in a QDIA.
