The Total View - (Page 36) Matching Contributions & Plan Design Important to Employees, Important to the Bottom Line In a recent study, 42 percent of employees stated if the dollar amounts were the same, they would prefer to receive a higher employer match in the employer’s 401(k) plan than a wage increase.4 That’s a significant amount of employees who are looking to their retirement years instead of a little extra at paycheck time. The overall average employer match was 39 cents per dollar deferred in 2006. Tax-exempt organizations had the highest match per dollar at 58 cents, followed by the mining industry. With 34 cents per dollar match, retail trade had the lowest match. Business Type Agriculture, Forestry, Fishing, Hunting Mining Utilities Construction Manufacturing Most Common Stated Match Formula 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 4% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 6% of pay 50% up to 4% of pay Match Contribution Per Dollar of Deferral Industry Agricultural, Forestry, Fishing Construction Finance, Insurance, Real Estate Manufacturing Mining Retail Trade Services Tax-exempt Technology Transportation & Communication Wholesale Trade 2006 $0.47 $0.37 $0.45 $0.37 $0.49 $0.34 $0.42 $0.58 $0.41 $0.38 $0.37 2004 $0.44 $0.36 $0.46 $0.36 $0.47 $0.33 $0.39 $0.58 $0.34 $0.37 $0.37 2002 $0.45 $0.35 $0.44 $0.35 $0.47 $0.34 $0.36 $0.61 $0.35 $0.37 $0.36 The most common stated match formula was 50% up to 6% of pay for retirement plans with services provided by The Principal. This was also true of the industry. Retail trades and healthcare industries averaged slightly less at 50% up to 4% of pay. 3 Wholesale Trade Retail Trade Transportation, Warehousing Publishing, Broadcasting, Data Processing Finance, Insurance Real Estate, Rental Leasing Professional, Scientific Services Other Services Technology Healthcare 1 The Principal Financial Group Sterling 2006 Asset Rollover Retention Study, as of January 2006 3 Profit Sharing Council of America 49th Annual Survey 4 2007 First Quarter Principal Financial Group Well-Being Index 2 36
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