HR Management & Compliance

401(K) Matching Getting More Generous?

According to the results
of a recent study, employers are getting more generous with 401(k) matching. The
portion of 401(k) plans with a match rate of 100 percent was 36 percent in
2006, up from just 26 percent in 2002. The study, conducted by Mercer Human Resource
Consulting, also found that 45 percent of 401(k) plans had a match rate of 50
percent in 2006, which was down a bit from 53 percent of plans in 2002. Also,
eight percent of plans offered a match rate of less than 50 percent in 2006,
down slightly from 10 percent of plans in 2002. And, 10 percent of plans had a
match rate between 51 percent and 99 percent in 2006, the same portion as in 2002.
The study looked at more than 1,025 employers’ benefit programs. Besides getting
tax breaks from providing matched 401(k) plans, employers use them as an
employee retention tool.


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