Our employer enforces mandatory withholding in the 401k plan every payday, which appears to be done correctly and timely. As per our benefits contract, the employer is supposed to match our contributions at 3%. This is paid at the end of their calendar year, not on our bi-weekly payroll. This year, we were notified on 1/26/2017 that they will not be matching our 2016 contributions. Can they can legally refuse to match? If the Employer benefit is changing, should we have been given notification prior to year end?

  • 2
    I'm not 100% sure, but I don't think it is legal to not give us the option to not participate in their 401(k). However, for the matching, my company does the same thing, I think it's called a discretionary match that may be anything from 0 up to the max percentage and is I think based on company performance/revenue metrics for the year. Jan 27, 2017 at 20:49

2 Answers 2


Employer contributions to a 401K are not mandated by law so they are well within their right to not contribute.

There is likely language in your benefits handbook that indicates employer contributions are contingent upon sufficient profits.

If you do indeed have a contract that states the employer will contribute 3% without exception, then this would be a contract violation. You could attempt to talk with HR/ownership, but you may also need to see a lawyer.

Most employers avoid "painting themselves" in that kind of corner.

  • 1
    Thank you for your answers, Our office was contracted out to a new company in July 2016:(we are an office site, out of state office). We have never been given access to the company benefits handbook. Our local administration has request one and we were given, policies on time off, termination policies. They do not have a version on they company website.. they only documentation we have been given was on the date of takeover that they would contribute 3% at year end & if your contribution was more, depending on profits, they may add up to 2% more.
    – ted
    Jan 27, 2017 at 22:13

You should have received a Summary Plan Description when you were setup in the new plan. That'll have the details on how the match is structured. If it's a 'discretionary' match, then the employer can do whatever they want as long as it's uniform (including no match at all). If it says they will match x%, then they are legally obligated to do so. The Plan Document language takes priority over your benefits handbook.

Short version - ask for the Summary Plan Description or Plan Document and see what it says.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .