Contributions made by the employer in addition to & contingent upon salary-deferral contributions made by the participant.
Matching contributions can be made to 401(k) plans-including SIMPLE 401(k) plans, SIMPLE IRAs and 403(b) plans.
Matching contributions are usually based on a percentage of the participant’s compensation.
Examples of matching contributions include the following
$1-for-$1 up to 3% of compensation
Translation , the employer will contribute $1 for every $1 the employee puts in as a salary deferral contribution. However, the amount the employer puts in will not exceed 3% of the employee’s compensation
$0.50 on every dollar, up to 6% of compensation
Translation , the employer will contribute $0.50 for every $1 the employee puts in as a salary deferral contribution, however, the amount the employer outs in will not exceed 6% of the of the employee’s compensation
IRC § 401(k), IRC § 408(p), IRC § 403(b) , The governing plan document
Additional Helpful Information
- Employees are encouraged to make as much salary deferral contribution as is necessary to receive the maximum matching contribution the employer will make
- Matching contributions under a SIMPLE IRA are not subject to the compensation cap