A match made for your retirement.

Turbo-charge your employees’ retirement savings by adding an employer-matching feature to your company’s 401(k).

What is Employer Matching?

Employer match is a common 401(k) feature that enables the employer to contribute to an employee’s retirement.

How it works

There are three common types of employer match: dollar-for-dollar, stretch, and dollar amount.

Why offer it?

It incentivizes employees to save for retirement and helps employers create a competitive benefits package.

How Fisher\SMB™ can help

There are many options when it comes to employer matching programs. Fisher\SMB helps business owners tailor their matching strategy to their individual needs.

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Safe Harbor

Learn how businesses utilize a Safe Harbor employer-matching feature to pass compliance testing and help employees save more for retirement.

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There are four primary ways to implement a 401(k) employer match:

Dollar for Dollar Match

An employer will match employee contributions dollar-for-dollar up to a certain percentage of the employee’s total compensation. For example, a 100% match of up to 3% of an employee’s compensation.

Stretch
Match

An employer matches 50% of employee contributions up to a certain percentage of the employee’s total compensation. For example, a 50% match of up to 8% of an employee’s compensation, for a total match of 4% of the employee’s salary.

Dollar Amount Match

An employer matches a set dollar amount to each employee. For example, an employer matches the first $5,000 of an employee’s contribution to the plan.

Safe Harbor Match

An employer uses one of three Safe Harbor strategies to automatically pass compliance testing: a non-elective contribution, a basic Safe Harbor match, and an enhanced Safe Harbor match.

Downloadable Chart

Safe Harbor Contribution Chart

Compare different Safe Harbor options to help your plan automatically pass compliance testing.

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Employer Matching Considerations

There are several factors you should keep in mind when evaluating the best employer matching options for your plan.

Compliance Testing

All 401(k) plans must pass annual non-discrimination testing, which is designed to ensure that Highly Compensated Employees (HCEs) don’t benefit significantly more than Non-Highly Compensated Employees (Non-HCEs).

Corrective Distributions

If an employer’s plan fails non-discrimination testing, the plan is considered ‘top-heavy’ and contributions made by HCEs are paid back through corrective distributions.

Safe Harbor Plans

Many employers choose a Safe Harbor match because it allows the plan to pass non-discrimination testing and enables all employees, including HCEs, to contribute up to the 2025 IRS maximum of $23,500(under age 50) /$31,000 (over age 50).

Learn About Safe Harbor

Eligibility and Vesting Schedules

Because matching can be costly, many employers use eligibility restrictions and vesting schedules to strategically manage costs by incentivizing desired employee behaviors.

Learn About Auto Enrollment

Contact Us

One of our 401(k) business specialists would love to talk to you about your company’s retirement plan needs.

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(888) 674-4504

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Safe Harbor Guide

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