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401(k) Plans Are Often a Workplace Benefit


A way to save for retirement, a 401(k) plan is offered by many Ohio employers as part of an overall benefit package. Essentially, it is an opportunity for employees to invest a percentage of their pre-tax income. This way, employees are not paying income tax on their retirement contributions until the money is taken out of the account.

If you have questions about your benefit package, particularly if you have concerns about contracts you are being asked to sign, it is important to talk over your concerns with a Columbus Ohio employment attorneys. Ohio workers have rights, an attorney can advocate for you.

Some Employers Match Contributions

If you are being offered an opportunity to contribute to a 401(k) work plan, it will be set up for you by your employer. Some companies match employee contributions. What this means is that your employer contributes funds to your retirement account.

Partial matching is when an employer matches an employee contribution up to a specific amount. So, for example, an employer could offer to contribute 50% of what an employee contributes, up to 6% of that individual’s salary. This is a common partial match agreement. To take full advantage of this type of an agreement, an employee needs to contribute 6% of their salary and receive the 3% of their salary contribution from their employer. A dollar-for-dollar match or a full match is when an employer contributes the same amount as the employee.

How to Qualify for a 401(k) Match

Whether or not an employee is eligible for a match depends on the employer and what programs they have in place. Do not assume you are automatically enrolled in a 401(k) program or that you are immediately eligible for matching contributions. Ask for clarity and benefit details when you are offered a position so you can join the organization with confidence.

Things to ask about a 401(k) plan:

  • Is a match contribution offered?
  • When will the match take effect?
  • Is there a guaranteed match amount?
  • What are the match limits?
  • Is there a vesting period?

Vesting periods are put in place by organizations to ensure they are not contributing to the accounts of short term employees. If there is a vesting period, an employee will have to stay at an organization for a specific period of time in order to secure the company contributions. If an employee leaves a company before they are vested, they will lose the match funds.

There is not a vesting schedule that all employers need to follow. Some organizations have no vesting period at all. Others vest over time. So, for example, your employer match may vest at 20% each year for your first five years. Then, after five years, you would be permanently vested.

Do you have employment law questions? The employment lawyers at Coffman Legal LLC can help. Also, they can help when employer retaliation is present. Our attorneys are advocates for all Ohio workers. Call 614-949-1181 for a free and confidential consultation.


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