401k matching for US employees
This is a follow up conversation that was initially sparked from (Setup Auto-Enrolment UK Pension) https://gitlab.com/gitlab-com/peopleops/issues/340
Although UK law requires pension contribution (and based on comments in that issue, GitLab will contribute a percentage amount), and (based on FGU, it is not to be confused with retirement matching - though it is still not obvious to me why it is different). It is strange why GitLabbers in the UK receive more benefits than GitLabbers in other countries. It is also concerning that GitLab is only doing this because it is required by law rather than doing it because it is better for the GitLab team.
I think it's important for GitLab to consider doing 401k retirement matching for US employees. It is common for companies to do so and it's still strange to me why GitLab doesn't do it.
According to https://www.quora.com/How-common-is-it-for-a-startup-to-offer-a-401k
We did a poll of Y Combinator startups and found that 75% of companies over 20 employees offered at least a non-matching 401(k) (some started when they were just 2 employees).
There are a few reasons for the popularity of the 401(k) for startups (which we’ve written about on our blog), but let’s look at a few of them here:
- With the advance in affordable 401(k) options for employers, there’s generally no reason not to set up a 401(k) for a startup, besides these: if you have major cash flow concerns or don’t yet offer health insurance -- they should be higher priority than a 401(k).
- If a company wants to grow beyond the startup stage, and develop into a profitable business, then attracting top talent and keeping the employees happy and productive should be a primary concern. A 401(k) can serve as an attractive part of a compensation package.
- Employers and employees will be happier if they understand how a few dollars per month into a 401(k) today can yield a relaxing and profitable retirement tomorrow. Younger employees will benefit significantly by creating a sound retirement fund as early as possible. Without the former cushion of defined benefit pension plans, today’s workers and employers need to prioritize their own retirement futures. Full disclosure: I’m a founder of Captain401, a Y Combinator-backed 401(k) provider with many startup clients.
In my opinion, we should do retirement matching for all GitLabbers but for the sake of this issue and to keep it iterative, I've created this issue for just the US entity.