A fixed percentage of the employee's salary is then withheld from each paycheck and contributed to the plan on the employee's behalf. Employees can receive an employer matching contribution of up to three percent of their pay. Employer contributions are automatically fully vested. You should consult with a pension specialist or plan provider to help design your plan. In the design, you will need to choose what mix of features is best for you and your employees.
Many companies require a waiting period of one year, to ensure the employee's permanent status.
Some companies let an employee join right away, but may delay any matching funds until a later date. Contributions are made on a pre-tax basis, and are usually a percentage of an employee's pay. In some cases the employer will match the employee contribution dollar for dollar. An employer may put some restrictions on matching funds. This is called a vesting requirement.