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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: cbr shadow on December 03, 2013, 03:05:07 PM

Title: Negotiate a higher company match on 401k? Possible?
Post by: cbr shadow on December 03, 2013, 03:05:07 PM
Since I'm allowed to contribute $17,500 of my salary into my 401k PLUS the company match (currently 5%), wouldn't it make sense to try to negotiate a higher company match in leu of a pay increase?  The advantage being that it would allow for me to put more money into my 401k.  Am I missing something here?  Are there rules against this?
Example:  I make $100k and my company matches 5% ($5000) currently.  If instead of giving me a raise they are willing to increase my match to 8% ($8,000) I could put $25,500 into my account ($17,500 + $8,000) instead of the $22,500 ($17,500 + $5,000).

Thanks,
Ryan
Title: Re: Negotiate a higher company match on 401k? Possible?
Post by: rocketman48097 on December 03, 2013, 03:16:29 PM
There are rules against this, they can't give you an increased match unless they give everyone else the same increased match. 
Title: Re: Negotiate a higher company match on 401k? Possible?
Post by: ioseftavi on December 03, 2013, 03:40:04 PM
There are rules against this, they can't give you an increased match unless they give everyone else the same increased match.

100% accurate - I believe it's ERISA rules in the US that prevent this type of thing.  Shoot for an increase in time off or something else (if you can't negotiate the higher base pay or whatever).  Good luck!
Title: Re: Negotiate a higher company match on 401k? Possible?
Post by: eman resu on December 03, 2013, 06:27:56 PM
Hi Ryan - Request and read your 401k Plan documents, if you haven't already. If there's anything you can leverage, it'll be in the Plan terms.  For instance, my employer's Plan offers higher contributions based on being a named officer among other things.  While I couldn't negotiate a higher contribution %age "just for me", I could negotiate a title change making me a named officer.
Title: Re: Negotiate a higher company match on 401k? Possible?
Post by: CDP45 on December 03, 2013, 10:53:11 PM
Also issues arise if you're a HCE, which is crazy that $105 gross on the coasts qualifies..