403(b) vs 401(k) Employer Match: Rules, Vesting, and True-Up
Match rates, vesting schedules, true-up contributions, and the ERISA vs non-ERISA difference. Updated 17 April 2026.
Typical match rates
401(k) average match
~4.5%
of salary matched on average (PSCA 2025 survey). For-profit competition for talent drives this higher.
403(b) average match
~3.5%
of salary matched on average. Nonprofit budget constraints and government-sector defined benefit pensions reduce matching pressure.
Common match formulas
| Formula | Minimum to contribute | Example on $60K salary |
|---|---|---|
| 100% match up to 3% of salary | 3% | $1,800 employer match |
| 50 cents on dollar up to 6% of salary | 6% | $1,800 employer match |
| 100% match up to 5% of salary | 5% | $3,000 employer match |
| Tiered: 100% first 3%, 50% next 2% | 5% | $2,400 employer match |
| Non-elective 3% (regardless of employee contribution) | 0% | $1,800, even without contributing |
Vesting schedules
Your own contributions are always 100% vested immediately. Employer match vesting depends on your plan. ERISA sets the minimum vesting rules:
3-year cliff vesting
0% vested in years 1-2, then 100% in year 3. Common in both plan types. You forfeit all employer contributions if you leave before year 3.
6-year graded vesting
20% per year from year 2 to year 6. You own 100% after 6 years. More common in larger plans.
Note: governmental 403(b) plans can set their own vesting schedules (sometimes longer than ERISA maximums). Check your specific plan document.
True-up contributions: the front-loader trap
If you front-load your 403(b) or 401(k) contributions and hit the $23,500 limit before year-end, your contributions stop. If your employer matches paycheck-by-paycheck (per-period matching), the match also stops when contributions stop. Result: you miss out on several months of employer match.
A true-up contribution is an end-of-year catch-up match the employer pays to make you whole. Not all plans offer this. Ask HR: "Does the plan have a true-up provision?" If yes, front-loading is safe. If no, spread your contributions evenly across the year to capture every match payment.
ERISA vs non-ERISA matching
Private nonprofit 403(b) plans are generally ERISA-covered. Their match rules, vesting maximums, and fiduciary standards follow federal ERISA requirements. Participants receive annual fee disclosures and can hold plan sponsors to a fiduciary standard.
Governmental and church 403(b) plans are exempt from ERISA. They can set their own vesting rules (sometimes much longer than ERISA maximums), are not required to provide participant fee disclosures, and have different fiduciary accountability. Some governmental plans have excellent employer contributions; others are minimal. Check your plan document.
One practical implication: 401(k) ADP/ACP nondiscrimination testing limits how much highly compensated employees (over $155K salary in 2026) can contribute if lower-paid employees do not participate enough. 403(b) plans generally do not have ADP/ACP testing, so highly compensated employees can max out without restriction.
Always get the full match. No exceptions.
An employer match is a 50-100% immediate return on your contribution before any investment growth. Even if your 403(b) has 2% fees, you should contribute enough to capture the full employer match. After the match, if fees are high, direct additional savings to a low-fee IRA at Vanguard or Fidelity. But never leave the match on the table.