Matches Still Not Universal
As 401(k) plans were first created 38 years ago, it might stand to reason that, by now, company matches would be universal. But that is not the case. In fact, plans show a wide disparity in acceptance of the feature, depending on their asset size, according to the 2015 PLANSPONSOR Defined Contribution (DC) Survey.
Overall, 71.8% of plans provide a company match. Less than half—49.2%—of plans with under $1 million of assets offer one. This percentage steadily rises, in lock step, with plan size. For instance, 64.4% of plans with $1 million through $5 million of assets provide a match, and 69.3% of plans with $5 million through $10 million do. This grows to 78.7% of plans in the $10 million through $25 million range, and to 81.3% of plans in the $25 million through $50 million range.
But that is where matches seem to hit a wall. They dip back down to 75.1% of plans ranging from $50 million through $200 million; to 79.8% of plans ranging from $200 million through $500 million; and to 78.4% of plans ranging from $500 million through $1 billion. Not until plan assets surpass $1 billion does the incidence of company matches rise back up, to 85.1%.
As for the match formula most commonly used, it is less than
50% of the first 6% of salary, employed by 28.8% of plans; this is closely
followed by 50% of the first 6% of salary, exercised by 27.1% of plans.
Does Your Organization Offer a Matching Contribution?
| Yes | No | Don’t know | |
| Overall | 71.80% | 27.70% | 0.50% |
| <$1mm | 49.20% | 48.50% | 2.30% |
| $1mm – $5mm | 64.40% | 35.00% | 0.50% |
| >$5mm – $10mm | 69.30% | 39.40% | 0.30% |
| >$10mm – $25mm | 78.70% | 21.30% | 0.00% |
| >$25mm – $50mm | 81.30% | 18.00% | 0.60% |
| >$50mm – $200mm | 75.10% | 24.90% | 0.00% |
| >$200mm – $500mm | 79.80% | 20.20% | 0.00% |
| >$500mm – $1b | 78.40% | 21.60% | 0.00% |
If You Provide a Match, What Is the Formula?
| >100% of first 6% of salary | 100% of first 6% of salary | 51%-99% of first 6% of salary | 50% of first 6% of salary | <50% of first 6% of salary | Other | |
| Overall | 7.70% | 9.60% | 19.80% | 27.10% | 28.80% | 7.00% |
| <$1mm | 6.50% | 8.90% | 22.00% | 22.80% | 30.10% | 9.80% |
| $1mm – $5mm | 6.30% | 6.80% | 21.00% | 22.20% | 36.60% | 7.10% |
| >$5mm – $10mm | 7.40% | 5.40% | 17.10% | 26.80% | 35.00% | 8.20% |
| >$10mm – $25mm | 8.90% | 9.20% | 12.40% | 28.60% | 34.90% | 6.00% |
| >$25mm – $50mm | 7.20% | 8.80% | 16.80% | 33.20% | 26.80% | 7.20% |
| >$50mm – $200mm | 5.40% | 9.70% | 20.40% | 33.30% | 25.40% | 5.70% |
| >$200mm – $500mm | 11.10% | 13.30% | 25.20% | 26.70% | 19.30% | 4.40% |
| >$500mm – $1b | 10.70% | 14.70% | 30.70% | 22.70% | 17.30% | 4.00% |
If You Provide a Match, How Frequent Are Matching Contributions?
| Each pay period | Monthly | Quarterly | Annually | Other | |
| Overall | 73.90% | 5.30% | 3.10% | 15.90% | 1.90% |
| <$1mm | 70.40% | 6.60% | 1.60% | 19.10% | 2.30% |
| $1mm – $5mm | 71.60% | 7.40% | 2.80% | 16.60% | 1.60% |
| >$5mm – $10mm | 74.50% | 3.60% | 3.60% | 19.10% | 2.50% |
| >$10mm – $25mm | 70.60% | 6.10% | 3.00% | 18.00% | 2.30% |
| >$25mm – $50mm | 70.60% | 7.80% | 4.60% | 33.30% | 3.20% |
| >$50mm – $200mm | 73.70% | 5.70% | 4.30% | 15.20% | 1.10% |
| >$200mm – $500mm | 81.70% | 3.00% | 2.60% | 10.20% | 2.60% |
| >$500mm – $1b | 88.30% | 2.30% | 0.80% | 7.80% | 0.80% |