Maximizing the Banner Health 401(k) Employer Match
One of the most valuable benefits offered by Banner Health is their generous 401(k) match policy. With a dollar-for-dollar match up to 4% of eligible compensation, Banner Health provides one of the most competitive matching programs in the healthcare industry. This comprehensive guide will help you understand exactly how Banner Health's employer match works and how to get more out of your 401(k).
Banner Health's 401(k) Match: The Basics
Banner Health offers a dollar-for-dollar match on your 401(k) pre-tax contributions, up to 4% of your eligible compensation. This means if you contribute 4% of your salary, Banner Health will contribute an additional 4% of your salary to your account. This is free money with no strings attached.
For example, if your annual salary is $150,000 and you contributed at least $6,000, Banner Health will contribute an additional $6,000. This would bring your total contributions to $12,000 for that year.
Eligibility
You are eligible to participate in the Banner Health 401(k) plan immediately upon being hired. However, the employer match does not become available until after you’ve worked with the company for a full year. Once you’ve reached your one-year anniversary, Banner will begin contributing to your account.
Note: Registry employees working through Banner Staffing Services are eligible for a separate 403(b) plan rather than the 401(k).
Vesting Schedule
Banner Health provides immediate vesting for both employee contributions and employer matching contributions. You are always 100% vested in all contributions made to your plan, as well as matching contributions made by Banner Health, and any earnings on them.
Match Timing
The employer match is calculated and deposited into your account every pay period. This means you don't have to wait until year-end to see your matching contributions. New payments will appear in your account with every paycheck.
Tax Benefits
Unlike many companies, Banner Health’s employer match does not count toward your annual 401(k) contribution limits. That means you can contribute up to the $23,500 limit for 2025 ($31,000 if you’re 50 or older) and still receive the employer match on top of that. This will give you additional tax-deferred savings beyond the usual cap.
Pre-Tax Requirement
Contributions to the Banner Health 401(k) can be made on a traditional (pre-tax) basis or a Roth (after-tax) basis. However, to receive the employer match, the first 4% of your contributions must be made with pre-tax funds. After contributing the first 4% pre-tax, you can make whichever type of contributions you prefer.
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How Banner Health's Match Compares to Competitors
According to Fidelity data, the most common 401(k) match formula is a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%. Compared to that standard, Banner Health's 4% dollar-for-dollar match is more generous than many employers in several ways:
Full match: Many employers offer only 50% matching, while Banner Health provides 100% matching.
Higher percentage: The 4% match level is above the 2%–3% that many companies offer.
Immediate vesting: Most employers require several years of service before employer contributions become vested, while Banner has immediate vesting.
Broad eligibility: In addition to full-time employees, part-time, per-diem, and flat-rate employees are also eligible for the Banner Health 401(k) and employer matching contributions.
The Banner Health True-Up Feature
Banner Health’s true-up feature protects you from losing matching contributions due to:
Irregular contribution patterns throughout the year
Salary changes during the year
Bonus payments that affect your contribution percentage
Starting employment mid-year
When calculating the true-up match, Banner will consider the earnings and contributions for the pay periods during which you were eligible for the match. Then, they will estimate what the full employer match would have been had the calculation been done on a full-year basis. During the first quarter, Banner will make a true-up matching contribution to reconcile the difference.
True-Up Example
Let’s say you earn $60,000 annually but receive a large bonus, causing you to max out your 401(k) contributions early and stop contributing for the last few months. Without the true-up feature, you might miss matching contributions for those final months.
With true-up, Banner will calculate what your full-year match should have been based on your total eligible compensation and ensure you receive the complete match you're entitled to.
Special Situations
Life is full of unexpected twists. Fortunately, Banner Health has policies in place to help you save for retirement regardless.
Starting Mid-Year
If you start working at Banner Health mid-year, you can begin contributing to your 401(k) immediately. You won’t have to wait until the next quarter or year. You will become eligible for the employer match after your one-year anniversary, with immediate vesting.
Salary Changes
If you receive a raise or promotion, your matching percentage will increase based on your new salary. If necessary, adjust your contribution percentage to maintain at least 4% at all times to capture the full match.
Bonus Payments
Large bonuses can affect your contribution timing. If bonuses cause you to hit the 401(k) limit early, you might miss later matching. Consider adjusting your regular contribution rate if you expect significant bonuses. The true-up feature will also protect against lost matching.
Leave of Absence
During unpaid leave, you generally cannot make 401(k) contributions since they're made through payroll. This means you won't receive matching contributions during unpaid periods. However, contributions and the employer match will resume as soon as you return to work.
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Tips to Maximize Your Banner Health 401(k) Match
Always Contribute at Least 4%
The most important rule is simple: always contribute at least 4% of your salary to receive the full employer match. This is essentially free money that provides an immediate 100% return on your investment. Even if money is tight, prioritize this contribution above other savings goals.
Understand the Pre-Tax Requirement
The first 4% of your contributions must be on a pre-tax basis to receive the employer match. After contributing the first 4% pre-tax, any additional contributions may be pre-tax, Roth post-tax, or both. Make sure your payroll deductions are set up correctly to meet this requirement.
Don't Front-Load Your Contributions
One common mistake is contributing your entire annual 401(k) limit early in the year. If you max out your contributions before December, you won't contribute anything in later pay periods, which means you won't receive matching contributions for those periods. While Banner Health's true-up feature helps mitigate this, it's better to contribute consistently throughout the year.
Start Contributing Immediately
If you haven’t started contributing to your Banner Health 401(k) yet, now is the time to start. The sooner you begin growing your wealth through strategic investments, the better. It’s never too early (or too late) to start preparing for retirement.
Review and Adjust Regularly
Life changes, and so should your contribution strategy. Review your 401(k) contributions at least annually. You should also consider adjusting your strategy when:
Your salary increases
You receive bonuses or other compensation changes
Major life events occur (marriage, children, etc.)
Get Help from the TrueWealth Team
Banner Health's employer match is an exceptional benefit that can significantly accelerate your retirement savings. However, as with all retirement planning, optimizing your 401(k) contributions can get complicated. It’s easy to make a costly mistake.
At TrueWealth Financial Partners, we specialize in helping professionals like you prepare for retirement. Our fee-only fiduciary advisors understand the unique challenges and opportunities in healthcare benefits and can help you develop a comprehensive financial plan tailored to your unique needs and goals.
Ready to optimize your Banner Health benefits and build a better financial future? Schedule a free consultation with one of our experienced advisors, and we’ll be happy to help you in any way we can.
FAQs
When can I start contributing to my Banner Health 401(k)?
You can start contributing immediately upon hire if you're a regular full-time, part-time, per-diem, or flat-rate team member. However, employer matching doesn't begin until after your one-year anniversary.
What happens if I leave Banner Health before my one-year anniversary?
If you leave Banner Health before reaching your one-year anniversary, you will keep all of your own contributions and any investment gains you’ve made. However, you won't have received any employer matching contributions since the match doesn't begin until after one year of service.
Can I change my contribution percentage during the year?
Yes, you can change your contribution percentage at any time by contacting Fidelity at 800-343-0860 or through your NetBenefits account online at netbenefits.com/BannerHealth.
What if I can't afford to contribute 4% right now?
Start with whatever you can afford and gradually increase your contributions. Even contributing 1-2% initially builds good savings habits. However, try to reach 4% as soon as possible to get the full employer match. It's free money you don't want to leave on the table.
How does the true-up feature work exactly?
Banner Health evaluates your prior year earnings and contributions to determine what your full employer match should have been. If you didn't receive the complete match due to irregular contributions, they'll make up the difference with a true-up contribution in the first quarter of the following year.
Can I contribute to both pre-tax and Roth in the same year?
Yes, after contributing your first 4% pre-tax (to get the employer match), any additional contributions can be pre-tax, Roth, or a combination of both, up to the annual IRS limits.
What's the difference between Banner Health's 401(k) and 403(b)?
The 401(k) is for regular Banner Health employees (full-time, part-time, per-diem, flat-rate), while the 403(b) is for registry employees working through Banner Staffing Services. Both offer similar contribution options and tax advantages.
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