"Your employer will match up to 10% of your compensation that you elect as pre-tax contribution. When you contribute to your plan, your employer matches 50% of the first 10% of your pay."

I don't get what the above statement mean really. I kind of understood the first statement. For example, if I make $100,000 per year, my employer can match upto 10% i.e., $10,000. What does the 50% of the first 10% of your pay mean?


It means however much of your pay you contribute, your employer will contribute half that much, with the employer's contribution capped at 5% of your pay (that is, 50% of 10%). If you make $100k, anything you contribute up to $10k will be matched at 50%. If you contribute the full $10k, your employer will contribute $5k (50% of what you contributed). If you contribute $6k, your employer will contribute $3k (again, 50% of what you contributed). If you contribute more than $10k, your employer will still only contribute $5k (50% of 10% of your pay is the cap on the employer contribution).

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  • And this is the case when I say the match outstrips the annual expense. It would take some time for a 1% fee to negate a 50% match. – JTP - Apologise to Monica Jul 20 '14 at 23:34

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