Employer matching is an effective way to ensure broad participation and avoid discrimination. Allows an employee to retire with peace of mind. Employees who are not worried about their retirement are usually more productive and satisfied workers. Gives an employee the option of receiving a reduced salary and having the difference contributed to the plan. 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.