Missing Your 401(k) Match? Check Your Statement Today
Missing Your 401(k) Match? Check Your Statement Today
Does your employer match your 401(k) contributions? Are you sure? Your match could be missing right now, and you might never know it. Surprisingly, a Department of Labor investigation found that hundreds of employers failed to deposit the promised retirement contributions into their employees' accounts. Unfortunately, many employees trust their retirement plan administrators completely, never bothering to verify if promised matches actually appear in their accounts.
If you work with a financial advisor, they may offer a complementary review of your 401(k) plan, whether or not they are managing that money. During one such review with Hurlow Wealth Management Group, "Lisa's" advisor found that despite her eligibility, her company had not made contributions for almost 18 months.
You may assume your claim to "free money" from your employer's 401(k) is a given, but employers are human. Some make mistakes, and others are neglectful or ignorant of their responsibilities. Very few actually act with criminal intent.
How 401(k) Matching Contributions Should Work
When you contribute to your 401(k), your employer also adds money. According to Fidelity, more than 85% of 401(k) plans offer some type of employer contribution. These contributions work alongside your own and grow tax-deferred until withdrawal.
Your employer deposits funds into your retirement account based on a predetermined formula. For instance, if your employer offers a 50% match on up to 6% of your salary, and you earn $100,000 annually, they would contribute $3,000 ($100,000 × 6% × 50%) to your account if you contribute at least $6,000.
Most companies establish their maximum contribution as a percentage of your salary. Employer contributions, however, don't reduce the amount you can personally contribute to your plan. The IRS allows you to contribute up to $24,500 in 2026 for workers under age 50 (and more for older workers), even if your employer's maximum contribution is only 3%.
According to Vanguard, there are over 180 different types of 401(k) matching programs. Here are the most common:
- Dollar-for-dollar match: Your employer contributes 100% of what you contribute, up to a certain percentage of your salary. For example, they match every dollar you contribute up to 3% of your annual income.
- Partial match: Your employer contributes a percentage of your contributions, typically 50 cents for each dollar you contribute, up to a certain percentage of your salary. The most frequently offered formula is 50 cents on the dollar on the first 6% of pay.
- Tiered match: Your employer provides different match rates at different contribution levels. For example, dollar-for-dollar on the first 3% of pay and 50 cents per dollar on the next 2% of pay.
- Capped match: Some plans (about 5%) cap employer contributions at a maximum amount, such as $2,000 annually.
How To Find A Missing Match
Detecting a missing 401(k) match takes a little effort and understanding of what to look for. The first place to start is the Summary Plan Description (SPD). Annually, your employer is required to provide this disclosure document, which describes the matching formula your employer promised.
With direct deposit, you may not even look at your pay stub very often. However, that is the first place to verify whether your contributions are being made. While some employers will make a one-time contribution after year-end, most make matching contributions with each payroll cycle. After confirming the formula from the SPD, calculate the amount that is actually going into the 401(k). For example, if your gross pay for the period is $10,000, and your employer match is expected to be 5%, but you only see a contribution of $300, that is a red flag. The next step is to see if you are contributing the maximum. If you are not getting the full match, you are missing out on free money. If you are putting in at least the 5%, and you don't see the full expected contribution, take the next step to verify that the contributions have not been made separately, but just not through payroll.
Log in to your 401(k) custodian, such as Fidelity, Vanguard, or T. Rowe Price, to view your statement and balance. Your account values are typically divided into three categories: employee contributions (yours), employer contributions (your company), and any gains (or losses). If you don't see anything under the employer contributions, that is a red flag.
It is time to contact your human resources department or plan sponsor. For this conversation, gather the SPD, your pay stub, and 401(k) statement. Highlight in the SPD what you understand to be the expected match, and calculate how much you think you are owed.
Why Your Match Might Be Missing
Again, it is very rare for employers to skimp on these contributions intentionally. There are some reasonable explanations for why your match might be missing or incorrect.
First, they might not have recognized that you were eligible. There are rules on how many hours you need to work before eligibility. If you were previously part-time and started working full-time, the HR administrator might have overlooked their responsibility in adding your match to the plan.
Second, the plan might have changed. According to the Center for Retirement Research, in 2020, between 5% and 20% percent of plan sponsors suspended their matching contributions. After the COVID-19 pandemic, most employers reinstated those contributions. Nevertheless, plans must notify employees at least 30 days in advance of suspending contributions.
Third, employers might not understand their own plan documents. Each 401(k) plan's SPD is a legal blueprint detailing exactly how contributions should work, and your employer must follow those guidelines. These mistakes are so common that the IRS created a fix-it guide for 401(k) plan administrators to make corrections.
Need Help?
Your retirement plan contributions will likely impact when and how much you can spend in your golden years. For over two decades, the fiduciary financial advisors at Hurlow Wealth Management Group have helped Midwest Millionaires plan for and execute successful retirement plans. If you would like a complimentary consultation to know if you are on track, CLICK HERE to schedule an introductory call today.
Sources:
Dept. of Labor Civil and Criminal Investigations
Fidelity Average 401(k) Match
ASPPA Most Common Matching Formulas
Center for Retirement Research- Employers Suspend Their 401(k) Match
IRS 401k Plan Fix-it Guide