Communicating the value of the match

What is an employer match?

An employer match is a contribution your company makes to an employee's retirement account based on the employee's own contributions. The exact matching formula varies by plan.

Example: Suppose your company matches 100% of employee contributions up to 5% of pay. An employee earning $60,000 who contributes 5% would put in $3,000 of their own money, and the employer would add another $3,000 — meaning $6,000 goes into the account over the year, before any investment growth.

Why does communicating the match matter?

Employees may not fully understand the financial value of an employer match. Some contribute only enough to participate without realizing they could receive more by increasing their savings rate. Others don't contribute at all because they believe they can't afford to save. Effective communication helps employees understand that the match is part of their overall compensation — and an opportunity to grow their retirement savings.

Make the match easy to understand

Retirement plan terminology can be confusing. When explaining your matching formula, use simple examples that show employees exactly how the benefit works.

Instead of stating: "The company matches 100% of employee contributions up to 5% of eligible compensation," consider: "If you earn $60,000 per year and contribute 5% of your pay, you put in $3,000 and the company adds another $3,000." A concrete example makes the value far easier to grasp.

Communicate throughout the employee lifecycle

The match shouldn't be explained only once at enrollment. Consider reinforcing the benefit at multiple points, including:

• During new-hire onboarding
• During annual enrollment campaigns
• When employees receive raises or promotions
• Before the end of the plan year
• When employees become eligible for the plan
• During financial wellness or retirement education sessions

Repeating the message at the right times helps employees remember the benefit and act on it.

Highlight the cost of contributing too little

One effective way to encourage participation is to show employees what they could be missing.

Example: An employee earning $80,000 contributes 3% of salary, or $2,400 per year. If the employer matches up to 5% of pay, that employee may be leaving $1,600 in potential employer contributions on the table by not contributing enough to receive the full match.

Framing the match as "money you could be leaving behind" makes the benefit more tangible and encourages employees to review their contribution rate.

Use multiple communication channels

Employees absorb information in different ways, so use a variety of methods. Effective channels may include:

• Email campaigns
• Enrollment materials
• Employee meetings
• Benefits portals
• Payroll reminders
• Short educational videos
• One-on-one retirement education sessions

Keeping the message consistent across channels reinforces the value of the match without overwhelming employees with technical detail.

Measure whether your message is working

Communicating the match is only effective if employees understand it and act. Consider tracking:

• Participation rates
• Average deferral rates
• The percentage of participants receiving the full employer match
• Changes in contribution rates following communication campaigns

These metrics help you determine whether your communications are effectively encouraging employees to maximize the benefit.

The bottom line

An employer match is a powerful tool for helping employees build retirement savings — but they need to understand how it works to take full advantage of it. By clearly explaining the formula, using relatable examples, and communicating consistently throughout the year, you can help employees make more informed decisions. If you'd like help developing communication strategies that explain your match in simple, engaging terms, reach out to one of our advisors today.