Companies That Offer the Biggest 401(k) Employer Match

These 3 companies offer above-average matches

Fact checked by Vikki VelasquezFact checked by Vikki Velasquez

Companies often offer various benefits, like competitive retirement savings plans, to attract and retain employees. One of these benefits is a company 401(k) match. This is essentially “free money” for employees who contribute the required amount. Let’s look at three examples of major companies that offer above-average 401(k) employer matching contributions.

Key Takeaways

• Companies are not required to offer a 401(k) match, but they often use this benefit to attract and retain workers.
• The average employer contribution match was 4.6% in 2024, and the median (middle-of-the-road) match was 4.0%, according to a Vanguard study.
• Major companies that provide some of the biggest matches include ConocoPhillips, Philip Morris International, and Amgen.

Companies with Some of the Best Employer Matches

The average employer match in 2024 was 4.6% and the median employer match was 4.0%, according to a Vanguard study. Companies that provide more than these amounts are more likely to stand out in the job market.

ConocoPhillips (COP), Philip Morris International Inc. (PM), and Amgen Inc. (AMGN) are among the companies with some of the best matching contributions.

ConocoPhillips

ConocoPhillips, a multinational crude oil producer, offers a 6% match to employees after they contribute at least 1% of their income to their 401(k). Then, the company provides up to another 6% in discretionary contributions based on company performance and other factors. According to the company’s plan, ConocoPhillips’ goal is to provide at least a 3% discretionary contribution, for a total matching contribution of 9%.

Philip Morris International Inc.

Philip Morris International, a multinational tobacco company, first matches up to 5% of an employee’s eligible contributions. Then, it contributes an additional 7% to 15% of the employee’s compensation based on the company’s annual performance.

Amgen Inc.

Once hired, each Amgen employee is automatically enrolled into the 401(k) plan to contribute 5%, an amount that they can adjust. Amgen will match 100% of the first 5% that the employee contributes to their plan. Additionally, the company automatically contributes up to 5% of eligible compensation each pay period, regardless of whether the employee makes a contribution to their 401(k) or not.

How Companies Can Offer a 401(k) Match

Tax-advantaged retirement plans like 401(k)s are regulated by the Internal Revenue Service (IRS) and the Employee Retirement Income Security Act (ERISA). Non-Roth accounts allow employees to contribute a percentage of their paycheck on a pretax basis and then choose their investments. The contributions are not subject to federal income tax until they’re withdrawn at a later date, typically during retirement years. (With a Roth account, employees contribute post-tax dollars so that when funds are withdrawn in retirement, the withdrawal is tax-free.)

Companies can contribute to their employees’ 401(k) plans in several ways, such as dollar-for-dollar matches or partial matches. With dollar-for-dollar matches, the employer will contribute the same amount of money that the employee does, up to a certain amount. For example, if an employee contributes $100 per paycheck, the employer will also contribute $100.

With partial matches, the employer can contribute a percentage of what the employee contributes. For example, if an employee contributes $100 per paycheck, the employer may offer a 50% contribution, or $50.

Companies can offer a matching benefit or other types of contributions. Then, they can deduct their contributions up to the IRS limit. To receive tax deductions, companies cannot offer different contribution matches to management from what they offer to their employees.

Note

Companies cannot contribute more than the legal limit, which is 100% of the employee’s annual pay or $69,000 (or $76,500 if the employee is age 50 or older) as of 2024, whichever is the lower value.

Are Companies Required to Offer a 401(k) Match?

Employers are under no obligation to provide a retirement plan or a matching 401(k) contribution. However, many companies provide a 401(k) match as a benefit to employees.

What Is Considered a Good Employer Match?

According to a 2024 study conducted by Vanguard, the average 401(k) match in the previous year was 4.6%, and the median match was 4.0%. About 1 in 7 plans provided $0.50 per dollar on the first 6% of employee compensation.

Should You Always Try to Maximize Your Contributions to Match the Employer Offer?

Maximizing your 401(k) contributions can help you get the most out of your employer’s match. When you contribute up to your employer’s matching limit, you avoid leaving free money on the table, so to speak. Consider your current financial situation, including your debt obligations and cash flow, as you determine whether to maximize your contributions to match the employer’s offer. Even if you have high-interest credit card debt, for example, it may make sense to contribute to the plan to get the employer match, since a 1-for-1 match is a 100% return.

The Bottom Line

Companies decide how much of a 401(k) match they want to offer, or whether to offer any retirement plan at all. In today’s competitive job market, many companies are offering more matching contributions to attract and retain employees. If you are applying for a new job, consider the benefits that the company provides, including how much they offer in 401(k) matching contributions.

Read the original article on Investopedia.