PLANSPONSOR - August/September 2019 - 8
Plan Analysis
Does Match Frequency Matter?
I
n 2018, the majority of plan sponsors
(81%) matched participant deferrals on
a per-pay-period basis, while a small
percentage (14%) continued to deposit
matches on an annual basis. This got us
wondering: Do less frequent matches
appreciably affect participants' savings?
To find the answer, we looked at data
for one of the longest-tenured and most
diversified funds-The Income Fund of
America from American Funds-and
hypothetically invested participant and
employer contributions.
The conclusion? When participants
received all matching contributions they
were eligible for, the frequency of match
had little impact on total savings-
matches credited twice a month vs. once a
year produced a 3% boost in account value.
In some ways, this is not surprising
as market variation is inherently random.
Still, the more frequent match resulted in
Frequency of Match Contributions
Made to Plan Participants
l Annually - Non-pay-period
l Monthly/Quarterly - Non-pay-period
l Per pay period
14.5% 8%
2018
77.5%
Source: PLANSPONSOR
14%
2013
69%
81%
Source: PLANSPONSOR
End of Career Account Value, Based on Match Type
100%
97%
Received match
2 times a month
Received match
annually
Source: Institutional Shareholder Services Inc.
5%
31%
Comparison of Employer Match
Outcomes (1986-2018)
l 2-times-per-month match exceeded annual match
l Annual match exceeded 2-times-per-month match
better participant outcomes in 22 of the
32 (69%) years analyzed.
The modest gap in outcomes
assumes the best-case scenario, that
participants received every match-of
either type-for 30-plus years. Missing
even a few annual matches, however,
materially affected results, suggesting
that employers committed to maximizing
participant outcomes should credit
matches more frequently. -PS
93%
88%
Missed 3 annual
matches (i.e., every 8 yrs)
Missed 8 annual
matches (i.e., every 4 yrs)
8 PLANSPONSOR.com August - September 2019
http://www.plansponsordigital.com/plansponsor/august-september_2019/TrackLink.action?pageName=8&exitLink=http%3A%2F%2FPLANSPONSOR.com
PLANSPONSOR - August/September 2019
Table of Contents for the Digital Edition of PLANSPONSOR - August/September 2019
Reality Check
2019 PLANSPONSOR Target-Date Fund Survey
2019 PLANSPONSOR Participant Survey
2019 PLANSPONSOR National Conference
Opportunities Grow
Real Estate Has Been a Haven
Health Savings Strategies
PLANSPONSOR - August/September 2019 - C1
PLANSPONSOR - August/September 2019 - FC1
PLANSPONSOR - August/September 2019 - FC2
PLANSPONSOR - August/September 2019 - C2
PLANSPONSOR - August/September 2019 - 1
PLANSPONSOR - August/September 2019 - 2
PLANSPONSOR - August/September 2019 - 3
PLANSPONSOR - August/September 2019 - 4
PLANSPONSOR - August/September 2019 - 5
PLANSPONSOR - August/September 2019 - 6
PLANSPONSOR - August/September 2019 - 7
PLANSPONSOR - August/September 2019 - 8
PLANSPONSOR - August/September 2019 - 9
PLANSPONSOR - August/September 2019 - 10
PLANSPONSOR - August/September 2019 - 11
PLANSPONSOR - August/September 2019 - 12
PLANSPONSOR - August/September 2019 - 13
PLANSPONSOR - August/September 2019 - 14
PLANSPONSOR - August/September 2019 - 15
PLANSPONSOR - August/September 2019 - 16
PLANSPONSOR - August/September 2019 - 17
PLANSPONSOR - August/September 2019 - 18
PLANSPONSOR - August/September 2019 - 19
PLANSPONSOR - August/September 2019 - 20
PLANSPONSOR - August/September 2019 - 21
PLANSPONSOR - August/September 2019 - 22
PLANSPONSOR - August/September 2019 - 23
PLANSPONSOR - August/September 2019 - Reality Check
PLANSPONSOR - August/September 2019 - 25
PLANSPONSOR - August/September 2019 - 26
PLANSPONSOR - August/September 2019 - 27
PLANSPONSOR - August/September 2019 - 28
PLANSPONSOR - August/September 2019 - 29
PLANSPONSOR - August/September 2019 - 2019 PLANSPONSOR Target-Date Fund Survey
PLANSPONSOR - August/September 2019 - 31
PLANSPONSOR - August/September 2019 - 32
PLANSPONSOR - August/September 2019 - 33
PLANSPONSOR - August/September 2019 - 34
PLANSPONSOR - August/September 2019 - 35
PLANSPONSOR - August/September 2019 - 36
PLANSPONSOR - August/September 2019 - 37
PLANSPONSOR - August/September 2019 - 38
PLANSPONSOR - August/September 2019 - 39
PLANSPONSOR - August/September 2019 - 2019 PLANSPONSOR Participant Survey
PLANSPONSOR - August/September 2019 - 41
PLANSPONSOR - August/September 2019 - 42
PLANSPONSOR - August/September 2019 - 43
PLANSPONSOR - August/September 2019 - 44
PLANSPONSOR - August/September 2019 - 45
PLANSPONSOR - August/September 2019 - 2019 PLANSPONSOR National Conference
PLANSPONSOR - August/September 2019 - 47
PLANSPONSOR - August/September 2019 - 48
PLANSPONSOR - August/September 2019 - 49
PLANSPONSOR - August/September 2019 - 50
PLANSPONSOR - August/September 2019 - 51
PLANSPONSOR - August/September 2019 - 52
PLANSPONSOR - August/September 2019 - 53
PLANSPONSOR - August/September 2019 - 54
PLANSPONSOR - August/September 2019 - 55
PLANSPONSOR - August/September 2019 - Opportunities Grow
PLANSPONSOR - August/September 2019 - 57
PLANSPONSOR - August/September 2019 - Real Estate Has Been a Haven
PLANSPONSOR - August/September 2019 - 59
PLANSPONSOR - August/September 2019 - Health Savings Strategies
PLANSPONSOR - August/September 2019 - 61
PLANSPONSOR - August/September 2019 - 62
PLANSPONSOR - August/September 2019 - 63
PLANSPONSOR - August/September 2019 - 64
PLANSPONSOR - August/September 2019 - C3
PLANSPONSOR - August/September 2019 - C4
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https://www.plansponsordigital.com/plansponsor/march_april_2024
https://www.plansponsordigital.com/plansponsor/january_february_2024
https://www.plansponsordigital.com/plansponsor/november_december_2023
https://www.plansponsordigital.com/plansponsor/september_october_2023
https://www.plansponsordigital.com/plansponsor/july_august_2023
https://www.plansponsordigital.com/plansponsor/may_june_2023
https://www.plansponsordigital.com/plansponsor/march_april_2023
https://www.plansponsordigital.com/plansponsor/december_2022_february_2023
https://www.plansponsordigital.com/plansponsor/october_november_2022
https://www.plansponsordigital.com/plansponsor/august_september_2022
https://www.plansponsordigital.com/plansponsor/june_july_2022
https://www.plansponsordigital.com/plansponsor/excellenceawards_2022
https://www.plansponsordigital.com/plansponsor/april_may_2022
https://www.plansponsordigital.com/plansponsor/february_march_2022
https://www.plansponsordigital.com/plansponsor/december_2021_january_2022
https://www.plansponsordigital.com/plansponsor/october_november_2021
https://www.plansponsordigital.com/plansponsor/august_september_2021
https://www.plansponsordigital.com/plansponsor/june_july_2021
https://www.plansponsordigital.com/plansponsor/april-may_2021
https://www.plansponsordigital.com/plansponsor/february-march_2021
https://www.plansponsordigital.com/plansponsor/december-january_2021
https://www.plansponsordigital.com/plansponsor/october-november_2020
https://www.plansponsordigital.com/plansponsor/august-september_2020
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https://www.plansponsordigital.com/plansponsor/april-may_2020
https://www.plansponsordigital.com/plansponsor/february-march_2020
https://www.plansponsordigital.com/plansponsor/december-january_2020
https://www.plansponsordigital.com/plansponsor/october-november_2019
https://www.plansponsordigital.com/plansponsor/august-september_2019
https://www.plansponsordigital.com/plansponsor/june-july_2019
https://www.plansponsordigital.com/plansponsor/april-may_2019
https://www.plansponsordigital.com/plansponsor/february-march_2019
https://www.plansponsordigital.com/plansponsor/december_2018-january_2019
https://www.plansponsordigital.com/plansponsor/october-november_2018
https://www.plansponsordigital.com/plansponsor/august-september_2018
https://www.plansponsordigital.com/plansponsor/june-july_2018
https://www.plansponsordigital.com/plansponsor/april-may_2018
https://www.plansponsordigital.com/plansponsor/february-march_2018
https://www.plansponsordigital.com/plansponsor/december_2017-january_2018
https://www.plansponsordigital.com/plansponsor/november_december_2017
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