Must my Employer make a matching contribution?
- Under all circumstances, a matching contribution will only be made if you have deferred money into the plan. Don’t miss out on this important benefit by failing to contribute to your 401(k).
- Some plans will not offer a matching contribution. It still makes great sense to defer, however. You may be forgoing tax savings for the contribution and tax-deferred accumulation. And how else are you going to save money for retirement.
- Some plans state that contributions are “discretionary” meaning that the Employer could decide later it cannot afford to make a matching contribution—even if you contributed.
- Some plans require that you meet certain conditions to receive a match. For example, you must be employed on the last day of the plan year; or you must have worked a certain number of hours during the plan year.
- Some plans are “safe harbor” plans. Instead of making a matching contribution, the employer will make a “profit sharing” contribution for eligible employees even if they do not defer into the 401(k).
