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Promote the value of your employer match

Does your organization match employee contributions into the plan? Make sure your participants know about it - and why they should take advantage of it.

"Stretch your match" to encourage saving more

Did you know that small changes to your match formula could help increase your participants' deferral percentages - without costing you any extra?

In the three different employer match formulas below, the employer contribution is the same. As the match "stretches," the participant contribution increases without increasing the overall matching contribution amount.

Match Formula Maximum Employer Contribution Average Participant Contribution Total Contribution
100% up to 2% of pay 2% 5.3% 7.3%
50% up to 4% of pay 2% 5.9% 7.9%
25% up to 8% of pay 2% 7.2% 9.0%*

Chart source: The Principal Financial Group. Analysis based on 172 contracts that showed a stated match formula. Total Contribution percentage includes participant contribution and employer match (as of 12/31/2012).

*The total contribution adds up to 9% instead of 9.2, because participants aren't contributing on average enough to get the full match.

Learn more about stretching your match. (PDF:121 KB)

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