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In American business, can the length of time before eligibility in a 401(k) matching program be negotiated? If so, is this considered to be an acceptable line of negotiation for a senior management position, or is it considered a faux pas?

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If you are in a senior management position, you should be negotiating over stock not some trivial 3% match vesting. Additionally, negotiating over vesting terms makes it look like you are not in it for the long haul, which is a very bad thing to convey during negotiations. – Bill Leeper Feb 13 '14 at 18:42
up vote 2 down vote accepted

If it is for a larger company, the vesting period may be a company-wide policy, spelled out in company documentation and handbooks, that they can't change per-employee. I've also found that the bigger and more corporate a company is, the less likely they are to budge on policy even for a top candidate or decision that could benefit the business.

If you're a valuable candidate, I feel like it's easier, from a policy standpoint alone, to give you a larger base, bonus, stock grant, vacation, etc, etc; than to change company-wide 401k policies.

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Not only that these are usually managed by a 3rd party investment firm. It may not even be possible to change the vesting schedule for an individual if they have a contract with the company. – Chad Feb 13 '14 at 17:26

In American business, can the length of time before eligibility in a 401(k) matching program be negotiated?

Anything can be negotiated.

Vesting/Matching periods are usually handled at a corporate-wide level though, and this sort of thing might be rather hard to pull off for the average candidate.

Certainly senior management can get away with far more than the average drone.

And certainly smaller companies can be much more flexible.

If the company is motivated enough, any exception can be granted.

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IANAA, but I believe that due to the federally controlled tax benefits of 401(k) programs, they need to be applied fairly across the set of employees. I believe there are even restrictions on participation by senior management based on general employee participation. Can't find the link I was viewing the other day, will post if I can find it. In the end, this may be one of the few things which isn't negotiable. – cdkMoose Feb 13 '14 at 17:46

401k rules are not entirely to the discretion of the company. Most of the fairness rules are there to make sure those on the top part of the salaries don't get preferential treatment.

You being an exception to the vesting period could draw some attention from the IRS and your company wouldn't want the hassle.

Go ahead and ask. If they can't do it, they may just feel a higher starting salary is easier.

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