401K Matching

[Guest PAccuardi]

I am seeking info on 401k matching practices for companies with less than 500 employees.

Thanks.

[Guest ERead]

What type of information are you looking for? If yourjust looking for industry averages, I can't help. If you are interested in some specifics to encourage participation amoung non-highly compensated employee's or would just like to know some creative ways to make matching contributions look and sound good on paper - please let me know. I have several suggestions for corporations with regards to limiting employer funding requirements, while helping to maximize participation. You can e-mail me with details by clicking the e-mail note next to the subject by my name. Good luck

[LCARUSI]

As I recall, there is an organization called SPARK - Society of Professional Adninistrators and Recordkeepers that compiles information and statistics on defined contribution plans. I think they also go under the name of Access Research tel# 860-688-8821. You might want to check with them.

Also, all of the major (and not so major) consulting firms periodically put out Studies with similar information. You should be able to get them or free or a small charge.

In my experience, the plan designs of the under 500 universe is not very different from larger plans with one important exception-matching levels tend to be lower typically 25% (on first 5 or 6% of EE pre-tax contributions). Smaller companies are reluctant to commit to larger matches,e.g.50%. Other than that, they are similar - no after-tax contribs, yes to loans, yes to hardship withdrawals., graduated top heavy vesting etc.

Very small plan design can be real different - because the intent is different - maxing out business owners and very highly compensated individuals.

I hope this is helpful and I hope we comments from other readers...

[Larry M]

one of the ways we have encouraged matching among reluctant plan sponsors (and to get them to promote employee productivity) is to make it flexible by gearing the rate of match to certain company profit goals. If, for example, profits are less than $x, no match, if profits exceed $X, the match is 20%, >$z, match is 40%, and so on.