401(k) Plan

Our company provides eligible employees with a 401(k) Qualified Retirement plan to assist with long-term savings for retirement.

A 401(k) retirement savings account is a tax-deferred account: 401(k) on Wikipedia.

401(k) Company match

We match 100% of the first 3% contributed by an employee. We match 50% of the next 2% an employee contributes, making the maximum match from thoughtbot 4%. We do not do any matching on contributions beyond 5%. Matching contributions are calculated on a per-payroll basis. Please see the following table for examples:

Your Contribution thoughtbot’s Contribution
1% 1%
2% 2%
3% 3%
4% 3.5%
5% and up 4%

You are eligible after 3 months of employment, and we do 100% immediate vesting.

True-up contributions

Whether through payroll timing issues or uneven contributions throughout the year, it is possible to have made 401k contributions which were matched according to the plan in a given payroll period, but which leave the employee “short” on company matching contributions at the end of the plan year. To correct this, we do an annual true up payment to any participants that fall into this group.

Exceeding the contribution limits

The IRS defines contribution limits on the amount any person can contribute to different types of retirement accounts, including 401k plans. If you plan on contributing the maximum amount in a given year, you don’t need to worry about timing or otherwise correctly structuring your contributions to hit the limit exactly – our payroll system will automatically reduce the final contribution which would have put you over the limit to prevent this from happening.

Note that if you have other employers in a given year and have contributed to other 401k plans, you will need to manage this limit yourself, since it applies to contributions to all plans combined.

Eligibility

All employees will be eligible to participate in the 401k plan 90 days after starting with thoughtbot.