Employers may make a matching contribution on all or a portion of a participant’s 401(k) deferrals in a given year.
Matching contributions provide employers with a tool to reward employees who take an active role in saving for their own retirement.
A typical matching contribution will match dollar for dollar, all deferred amounts up to 3% or more of an employee’s compensation.
As with nearly all retirement plans, matching contributions and the growth in the value of plan investments are not subject to income tax until the participant receives a distribution.
Contact us today if you are interested in setting up a defined contribution plan with a match feature, or if you’d like to add a match feature to your existing 401(k) or profit sharing plan.
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