Question
What approach should we take to employer matching on our 401(k) plan for employees in their first year?
Background
The company currently offers a full 4% match starting on day one. Finance leaders are exploring options such as graduated matching or a waiting period to control costs and encourage retention, while employees value strong retirement support from the start.
Options
- Maintain the current full match from the first paycheck.
- Introduce a 6–12 month waiting period before the full match applies.
- Use a graduated match that increases over the first three years.
- Reduce the overall match and redirect funds to salary or bonuses.