CHICAGO (September 2, 2004) - Give employers credit--the matching contributions they offer 401(k) plan participants can make a big difference in retirement savings. “An employee who takes full advantage of their employer’s matching contribution can increase their retirement savings by as much as 50 percent,” said David Wray, President of The Profit Sharing/401(k) Council of America (PSCA). That’s free money that could be worth $230,000 or more after 20 years of saving in a 401(k) plan. That $230,000 could buy a participant a 20-year payment during retirement of almost $23,500 per year (assuming 8% rate of investment return).

This year, National 401(k) Day will be celebrated on Tuesday, September 7th. As retirement follows work, 401(k) Day officially falls on the day after Labor Day. As we prepare to celebrate National 401(k) Day 2004, PSCA urges plan participants to increase their savings to get the full employer match.

That’s challenging because far too many employees are not taking advantage of matching contributions. Aon Consulting surveyed 130,000 employees participating in 401(k) plans and discovered that those who turned down the match in 2003, left $89 million dollars of employer contributions on the table. To bring this to a more personal level, an employee earning $30,000 a year who does not save 6% of pay from age 25 to age 65 is saying “no” to over $230,000 from his employer. This is the amount the employee would have earned with a 3% employer match and average account earnings of 8% per year. With salary increases, this pot of money would be even larger.

Projecting the survey results to encompass all U.S. employees who are not taking full advantage of their employers’ matching contribution finds these employees are collectively walking away from about $30 billion dollars. This reflects the matching contributions left behind by employees who are either not saving in their employers’ 401(k) plan or are not saving enough to get the full matching contribution. “These employees say they either can’t afford to contribute or think they can wait until later. Either way, they are losing their best opportunity for a financially secure retirement,” said an Aon Consulting spokesperson.

To help employers on 401(k) Day 2004 motivate employees to greater 401(k) savings, PSCA is offering its Retirement Ready program, available online at www.401kday.org, free of charge. This program features interactive and print educational materials, such as posters, payroll stuffers, employee announcements and interactive games. A step-by-step guide or action plan that walks sponsors through the options they have in celebrating the event, and encouraging participants to save more, is also available on the site as are retirement planning tools for participants, an annual retirement checkup and retirement calculator. In addition, communication materials in Spanish are available to PSCA member companies.