How Far Will Participants Stretch for the Match?
The employer match has proven to be a powerful draw over the years — but a new survey suggests there are limits.
Asked how they would respond if match levels were as low as “100% of the first 3% of salary,” 87% of respondents to the 2015 PLANSPONSOR Participant Survey said they were willing to save enough to receive the maximum match. However, that figure dropped to 59% when the match level was stretched to “50% of the first 6% of salary.” At “25% of the first 12% of salary,” just four-in-ten were willing to contribute to get the full match.
While overall fewer participants maximized the stretched match, about a quarter (28%) did show a willingness to increase their contribution when the match threshold was raised to 6%, and half that many (13%) increased their deferrals above 6% when the match was stretched again.
Of course, there might be a difference between what participants say they would do, and what they would actually do.