Bigger 401(k) Matches Boost Employee Contributions

It appears 401(k) participants want plan sponsors to be better matchmakers, as research shows doubling a 401(k) match increases employee contributions.
Published by the TIAA-CREF Institute, the study finds that when a match is raised from 50% to 100%, contributions spike 25%. The findings reveal a disconnect between participants and plan sponsors, as greater numbers of employers are paring down or altogether eliminating 401(k) matches.
The study’s authors allude to this trend, stating, "Understanding the impact of matching is critical to understanding the impact of these changes on retirement income security for a workforce increasingly dependent on 401(k) plans for retirement.