Key Takeaways:
- Costco contributes 4% to 9% of pay regardless of employee contributions
- Average 401(k) match is 4.7%; only 6% of plans offer 7% or above
- Altria and Stewart's Shops deliver total employer contributions of 13% to 17%
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Employers boost 401(k) contributions to 17% in talent war
A growing number of US employers are offering 401(k) contributions of 10% or more of pay, far exceeding the 4.7% average match.
Costco contributes 4% of pay to worker 401(k) accounts regardless of employee contributions, rising to 9% for those with 25 or more years of service — part of a broader push by US companies to use retirement benefits as a retention tool.
"It's distinctive. It probably creates really strong incentives for employees to contribute," Chris West, a managing director at human-resources consulting firm WTW, said of the accelerated matching rates at companies such as Visa and Mastercard.
The average company 401(k) match is about 4.7% of eligible salary, according to a Vanguard analysis of plans it manages. Only 6% of those plans offered a promised matching contribution totaling 7% or above in 2025. Boeing offers a 10% match, while Southwest Airlines provided a dollar-for-dollar match of up to 9.3% of salaries in 2024. Visa puts in $2 for every $1 that an employee deposits up to the first 5% of pay, and Mastercard puts in $1.67 for every $1 on the first 6% — both yielding a 10% total employer contribution.
For employers in specialized fields, benchmark surveys determine what benefits attract top talent. The 2022 Secure 2.0 Act expanded the toolkit further, enabling companies including Boeing, Verizon and Chipotle to offer matching contributions for employee student-loan payments. With the 2026 401(k) contribution limit rising to $24,500 for workers under 50, the gap between average and top-tier plans can mean hundreds of thousands of dollars in retirement savings over a career.
Nonelective contributions push total pay above 10%
Beyond matching, some employers use nonelective contributions — deposits made regardless of whether workers contribute. Tobacco company Altria Group matches employees up to 3% but adds a profit-sharing plan that brings total employer contributions to between 13% and 17%. The Aerospace Corp., a nonprofit government contractor, uses a 3% match but provides a total of 12% for the longest-tenured employees through added nonelective contributions.
Unionized workers at Ford and General Motors receive a 10% nonelective contribution as their retirement plan, up from 6.4% under contract negotiations in 2023. Both automakers shifted new hires away from pensions about two decades ago.
ESOPs turn cashiers into millionaires
Employee stock ownership plans offer another route to retirement wealth. Publix, a Florida-based grocer, automatically provides employees with shares of company stock after they clock 1,000 hours within a year and offers an option to purchase more. Stewart's Shops, a regional gas and ice-cream chain in Vermont and upstate New York, operates an ESOP-only program in lieu of a 401(k). The company says its employees have seen retirement contributions averaging 17% over the past five years, and more than 200 of its cashiers have become millionaires through stock ownership.
This article is for informational purposes only and does not constitute investment advice.
