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401(k)s How Much Employers Are Matching

August 2, 2005
Related Topics: Retirement/Pensions, Featured Article, Compensation

S ome employers base their match on how much profit the company is making. Other employers have what’s called a "graded match," in which the employer matches, say, 50 cents for each dollar an employee contributes up to 3 percent of the employee’s pay, and then 25 cents for each dollar on the next 3 percent.

Despite these variations--matching on profit, graded matches or other arrangements--most employers offer a fixed match, such as 50 cents for every dollar of an employee’s pay, up to a certain percentage of pay. In its study titled "2005 Trends and Experiences in 401(k) Plans," Hewitt Associates found that 70 percent of employers offer fixed matches.

Here’s a breakdown of how those employers are offering their matches, according to Hewitt.

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