How the MatchSavings ISA Benefit Works

Employers are uniquely positioned to impact the financial wellness of their employees by providing tools which help them manage their finances more effectively.

MatchSavings is an employee benefit offering which allows employees to contribute to a savings plan through payroll deduction, like a 401(k) plan. However, unlike a 401(k) plan, MatchSavings is funded with after-tax dollars and is for emergency, short and mid-term savings objectives. There is no penalty for withdrawing money. Employees can start, stop, alter or withdrawal savings at any time without having to complete forms or seek employer approval.

Employers may electively offer matching contributions as an incentive to their employees. Match formulas may be based on a straight percentage of employee contributions (traditional) or could be earned over time (time-based). Match rates and intervals are determined by the employer. An employer might also set a cap on matching contributions.

Match Examples

Example of Traditional Match Formula

ABC Company offers to match employee savings at a rate of $.05 cents on the $1.00. This example provides the employee a 5% return on investment (ROI) even before interest or investment returns are earned.

Employee payroll deducted contribution
Employer 5% match
Amount deposited in Employee ISA

$100
+ 5
105

Example of Time-Based Match Formula (Patent Pending)

XYZ Company offers to match employee savings at a rate of $.10 cents on the $1.00 for each six month interval that the employee leaves their contribution in the plan for a maximum of 2 years. In this case, the employee would pick up a 10% match in the sixth month after making the contribution; another 10% match in the 12th month; another 10% match in the 18th month, and a final match in the 24th month, providing the employee did not withdrawal their contribution before passing the designated match intervals. The employee would receive a 40% ROI for leaving his contribution in the plan for two years. Each payroll deducted deposit is “time-stamped”. An employee may withdrawal savings at any time, however, he would forego the match intervals subsequent to the withdrawal if the withdrawal occurs within the scope of maximum match period (i.e. two years in this example). There is no penalty for taking money out at anytime. In this case, there is an incentive to leaving savings in the account for a period to accumulate and grow.

Employee payroll deducted contribution
Employer match after 6 months in the plan
Employer match after 12 months in the plan
Employer match after 18 months in the plan
Employer match after 24 months in the plan
Amount deposited over two years in employee ISA

$100
+ 10
+ 10
+ 10
+ 10
$140

Examples of Match Limits

ABC Company offers a specified match rate ($.05/$1.00) for up to 3% of compensation - OR - ABC Company offers a specified match rate ($.05/$1.00) up to $1,000 per year.
XYZ Company offers a time-based match rate ($.10/$1.00) at specified intervals (every six months) for up to two years.

A MatchSavings program is simple to administer.

MatchSavings software:

Tracks all contributions and withdrawals by date
Sorts match eligibility
Generates Payroll and Match reports for the employer’s review each pay period
Offers automated payment of savings and match deposits

Employees collect interest on their balance. In the near future, Employees may add a separate investment account, which will be linked to the interest account, giving employees access to diversified low-cost investment options. Employees will manage the flow between their interest and investment accounts through one portal.

MatchSavings offers helpful savings tips, encouragement, and personalized goal tracking for participants. In the near future, MatchSavings will offer financial tips and tools such as financial calculators, consumer guide links, and credit score resources designed to improve consumer decisions.