I want to understand if these policies would be considered typical, better than average, or below average.
An employer offers a matching contribution to 401K, details are:
- 0% vested in employer contributions until year 2, then 20% vesting each year until year 6.
- Max annual employer contribution $3,250 (3% of a 100K salary, this is a hard number and not a percentage however)
- Employer matches 50% of deferrals up to the $3,250 limit
To receive the match employees must be
- Still employed on Dec. 31
- Have worked 1,000 hours in past calendar year
Match is paid out at end of Q1 the following year
For an employee with a start date of July 29 2019, working 40 hours per week, the effective breakdown is as follows.
- First contribution will be paid out in Q2 of 2021 (19 months after hire date)
- Max amount of first contribution is $3,250