"joeNOSPAM@[EMAIL PROTECTED]
" <joe.weinstein@[EMAIL PROTECTED]
> writes:
> Hi all. We know that we should do all we can
> to get as much as we can of a company
> matching contribution to a 401k. Can anyone
> describe the benefit to, or discount to the
> company for it's contribution? I am quite sure
> a company bottom-line isn't lowered dollar-for-dollar.
> I know of billion-dollar companies with differing
> matching amounts and programs, and I wonder
> why.
Well, different companies offer other benefits and perqs to employees,
as well; depending on where you go, you might find an employee stock
purchase program, tuition reimbursement, a whole set of health plans
to choose from, paid sabbatical leave, on-site gym or reimbursement
for joining one, etc. Presumably they offer this stuff because they
think it'll help them attract and retain good employees, or make
employees happier and more effective on the job.
When I worked at a Large Chip Manufacturer, they didn't match 401k at
all, but instead preferred to make a variable contribution into a
profit-sharing plan that vested over time. The actual amount of money
was quite generous, but as an employee you had to accept that (a) you
wouldn't know how much you were getting in advance and (b) you had to
stick around for N years before the money was actually yours. From
the company's point of view, (a) allowed them to cut back in lean
times, and (b) encouraged employee retention.
My current employer offers a straightforward fixed match on the first
5% of your salary with no vesting period, which I think is probably
more typical. It's a small company, management who set up the plan is
as interested in deferring part of their compensation and saving for
retirement as we peon employees, and I think it's seen as a fixed cost
of hiring good people.
-Sandra the cynic
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