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Most DC plan participants receive matching contributions

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More than three-quarter of Americans who contribute to an employer-sponsored retirement plan receive matching contributions from their company, new research shows.

TIAA-CREF releases this finding in a new survey of conducted on behalf of TIAA-CREF by an independent research firm. The survey polled a random sample of more than 1,000 adults nationwide on their retirement plans.

The research shows that 78 percent of the survey respondents, all participants in their companies’ defined contribution plans, receive matching contributions. And 77 percent of those who have matching contributions save enough to receive the full employer match.

However, only 72 percent of women contribute enough to receive the full employer match, compared with 82 percent of men, the report states. And only 64 percent of those earning less than $35,000 a year receive the full match.

“These survey results show that some groups of people in particular aren’t maximizing the full value of their retirement plan,” says Teresa Hassara, executive vice president of TIAA-CREF’s Institutional Business. “When employees don’t get the full match that their employers offer, they are essentially walking away from free money.”

The survey finds that employees would welcome more information from their employers on making the most of their retirement plan match.

Forty percent of the employees who are not currently contributing enough to get the maximum matching funds from their employers said they get reminders to do so and are happy to receive them. An additional 32 percent do not receive reminders from their employer but said they wish they did.

“An employer match is a very compelling factor in determining whether employees contribute to a defined-contribution retirement plan, but just offering it is not enough,” Hassara says. “Plan sponsors must ensure they are communicating the benefits of the match to employees, particularly those who are not currently reaching the full match. Their communications should be targeted to various groups’ unique financial needs.”

For low earners, for example, plan sponsors can explain the inherent benefits of saving for retirement and position the matching contribution as part of a larger focus on long-term financial well-being. For women, more information about the match may be effective. Of those not receiving the full match, 17 percent of women (compared to 10 percent of men) said that more information about how the match works would make them consider increasing contributions.

TIAA-CREF asked survey respondents how much they would earn from a 3 percent employer match. In the example, the match would be worth $72,518 by the time they were 65. However, one-third (32 percent) of respondents thought it would be worth less than $50,000.

Women, Gen Y respondents and those earning less than $35,000 a year were even more likely to underestimate how much the employer contributions will translate into.


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