Article

Boosting Employees' Savings and Keeping Talent

Few employers still offer pension benefits, but many have company-sponsored retirement plans, like a 401(k) or 403(b). Employers concerned about losing top talent might consider generous matching contributions to the company-sponsored plan as a retention tool.

January 18, 2025
Important Disclosure: Content on our website and in our newsletters is for informational purposes only. The information provided may (or may not) directly apply to your situation. We recommend that readers work directly with a professional advisor when making decisions in the context of their specific situation.

Employer-sponsored retirement plans, such as 401(k) or 403(b) plans, have become an essential part of the benefits package offered by companies to attract and retain employees. One of the key features of these plans is the employer's matching contribution, which can vary from company to company.

A relatively small number of employers offer generous matching contributions, exceeding the standard dollar-for-dollar match, to enhance their recruitment efforts and compensate for discontinuing defined benefit pension plans.

Let’s examine how these rich matching contributions can boost employee savings and support recruitment and retention efforts.

Attracting and Retaining Top Talent

In today's competitive job market, companies are constantly seeking ways to attract and retain top talent. Offering a generous employer match for retirement savings plans is one such strategy.

Employees who feel that their employer is invested in their long-term financial well-being are more likely to stay loyal to the company. Moreover, candidates comparing job offers may be swayed by a more attractive retirement savings match, making it a valuable recruiting tool.

The Decline of the DB Pension Plans

Many companies have phased out traditional defined benefit pension plans, which guarantee employees a specific income upon retirement. These plans have become less popular due to the financial risks and costs associated with maintaining them.

By offering a richer matching contribution for their defined contribution plans (e.g., 401(k) or 403(b) plans), employers can help offset the loss of the guaranteed income provided by pension plans, ensuring that their employees can still build substantial retirement savings.

Fostering Financial Security

Employers who are concerned about their employees' ability to retire comfortably may choose to provide a more generous match to help workers build their retirement savings faster. A rich matching contribution can significantly accelerate the growth of an employee's retirement savings, reducing the risk of financial insecurity in retirement.

This not only benefits the employees but also helps to establish a positive company culture where workers feel supported and valued.

What Employers Can Do

While relatively few employers offer rich matching contributions for their employees' retirement savings plans, those that do so reap numerous benefits. By demonstrating a commitment to their employees' long-term financial well-being, companies can foster loyalty and trust, which ultimately contribute to a more successful and prosperous organization.

As the job market continues to evolve, employers may want to consider exploring richer matching contributions as a means to gain a competitive edge in attracting and retaining top talent.

Other content you may like

  • The ABCs of Estate Planning

    September 3, 2025
    Do you need an estate plan? It’s not always a popular topic, but it’s an important consideration for everyone, regardless of income or age. Learn the basics of what’s covered in estate planning and how a professional can guide you through your unique circumstances.
    Read this Article
  • Investing in Your Vacation

    Investing in Your Vacation

    July 1, 2023
    Taking a vacation is an investment in your own well-being, in your career, and in the company you work for. Are vacations a priority to you or do you avoid this important investment? This article takes a look at some of the reasons for skipping vacations, as well as the benefit you might not have considered.
    Read this Article
  • 10 Best Financial Benefits for Military Families

    10 Best Financial Benefits for Military Families

    June 30, 2021
    Members of the military have a lot of special financial challenges that most people don't encounter. However they also have access to many financial benefits that can help. Here are the top ten available and how to use them to improve your family's financial future.
    Read this Article
  • The Rising Costs of Back to School and Education

    May 13, 2025
    The rising cost of education is a growing concern for many families. This article addresses contributing factors and offers practical solutions for effectively managing the financial burden. Discover tools and actions to help plan for future education expenses.
    Read this Article
  • The link you have selected is located on another server. The linked site contains information that has been created, published, maintained, or otherwise posted by institutions or organizations independent of this organization. We do not endorse, approve, certify, or control any linked websites, their sponsors, or any of their policies, activities, products, or services. We do not assume responsibility for the accuracy, completeness, or timeliness of the information contained therein. Visitors to any linked websites should not use or rely on the information contained therein until they have consulted with an independent financial professional. Please click “Continue to Link” to leave this website and proceed to the selected site.
    phone-handset