COMP NEWS – A 401(k) is one of the most popular types of employee benefit, allowing workers to benefit from long tenures with a competitive retirement savings match from their employers.

Companies often offer various benefits like competitive retirement savings plans to attract and retain employees. They can provide company 401(k) matching contributions that stand out as above-average to draw more potential new hires or keep their employees.

Employers are not legally obligated to provide employees with a retirement plan. Instead, they do so to provide a benefit to attract and retain good talent.

The average employer match in 2020 was 4.5% and the median employer match was 4.0%, according to a Vanguard study.1 So, companies that provide more than these amounts are more likely to standout in the job market.

The average 401(k) match varies, but a 2020 study found that it typically landed around 4.5%.

According to a 2020 study conducted by Vanguard, the average 401(k) match in the previous year was approximately 4.5% and the median match was 4.0%. About 20% of the companies that offered matches required their employees to work for a year before receiving the match.

But not all companies are treating 401(k) matches as “average.” Three companies that offer exceptional 401(k) matches to their employees are ConocoPhillips, a crude oil producer, Philip Morris International Inc., a tobacco company, and Amgen Inc., a multinational biopharmaceutical company. See their match rates below:

ConocoPhillips

ConocoPhillips, a multinational crude oil producer, offers a 6% match to employees after they contribute at least 1% of their income to their 401(k). Then, the company provides up to another 6% in discretionary contributions based on company performance and other factors. According to the company’s plan, ConocoPhillips’ goal is to provide at least a 3% discretionary contribution, for a total matching contribution of 9%.2

Philip Morris International Inc.

Philip Morris International, a multinational tobacco company, first matches up to 5% of an employee’s eligible contributions. Then, it contributes an additional 7% to 15% of the employee’s compensation based on the company’s annual performance.3

Amgen Inc.

Once hired, each Amgen employee is automatically enrolled into the 401(k) plan to contribute 5%, an amount they can adjust. Amgen will match 100% of the first 5% the employee contributes to their plan. Additionally, the company automatically contributes up to 5% of eligible compensation each pay period, regardless of whether the employee makes a contribution to their 401(k) or not.

As the economy heaves in preparation for a potential recession and employers look to gird their companies with top-performing talent, competitive organizations may look to reevaluate their 401(k) match policies to better retain essential employees.

To read more about companies that offer exceptional 401(k) matches, click here.

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