Mercer: 401(k) Matches Getting Richer

February 26, 2007 ( - Employer 401(k) matching contributions are getting more and more generous, according to a new Mercer Human Resource Consulting report.

A Mercer news release said the number of 401(k) plans with a match rate of 100% has steadily risen over the past five years, from 26% of plans in 2002 to 36% in 2006.

The Mercer analysis of the benefit programs of more than 1,025 U.S. employers, indicates that the majority of organizations now offer pretax retirement savings plans with nine out of 10 sponsoring a 401(k) or 403(b) plan, according to the announcement.

In other benefits data, in terms of the relative value of employee benefits overall, including health care coverage, retirement and time loss, Mercer said nonprofit organizations (including civic and professional associations, religious organizations and major foundations) offer the highest level of total benefits at $35,300 or 131% of the market median, followed by government employers at $34,100 or 127% of the market median.

“Benefit costs have been escalating to an unsustainable level and many employers are making tough decisions to reduce the level of benefits offered,” said Jennifer Calhoun, a principal with Mercer Health & Benefits. “In general, they’re placing less value on benefits that are beyond marketplace norms. They’re realizing that benefits at standard levels are just as effective for attracting and retaining top talent.”

Mercer’s Spotlight on Benefits can be purchased online at or by calling 800-333-3070.