As organizations increasingly move away from traditional defined benefit pension plans to defined contribution plans such as 401(k)s and 403(b)s, the match rates (% of the employee's contribution that is matched by the employer) are becoming more generous, according to a recent study by Mercer Human Resource Consulting.
According to Patria Pou, a principal with Mercer:
While a 50% matching contribution continues to be the most prevalent match level, the number of employers matching at 100% has risen steadily.
This change in the prevalence of different plan match levels from 2002 to 2006 is illustrated below:
In 2006 (percentage of plans at each match level)
- Match rate of less than 50% - 8%
- Match rate of 50% - 45%
- Match rate of 51% to 99% - 10%
- Match rate of 100% - 36%
- Match rate of greater than 100% - 1%
In 2002 (percentage of plans at each match level
- Match rate of less than 50% - 10%
- Match rate of 50% - 53%
- Match rate of 51% to 99% - 10%
- Match rate of 100% - 26%
- Match rate of greater than 100% - 1%
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