Does Elon Musk offer 401(k) plans to Tesla employees?

Bruno Cooke June 15, 2022
Does Elon Musk offer 401(k) plans to Tesla employees?
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In a wide-ranging twopart interview with the Tesla Owners Silicon Valley YouTube channel, chief executive Elon Musk discusses the founding of Tesla, the development of its cars, memes, Easter eggs and more – but does his company match employee 401(k) down-payments?

Does Elon Musk offer 401K plans to Tesla employees?

In a word, yes. Tesla’s 401(k) matching program kicked off on January 1, 2022, according to Drive Tesla Canada.

Employees apparently received a memo beforehand informing them that the company would be matching half of their 401(k) contributions. Drive Tesla obtained a copy of the memo, which includes the following:

“As part of our commitment to help you meet your retirement savings goals, beginning January 1, 2022, Tesla will be implementing a discretionary employee match. Tesla will match 50% of the first 6% (capped at $3,000 annually) of your eligible compensation that you contribute to your 401(k) plan.”

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The outlet adds that, while some employers’ 401(k) matching programs “can take several years for the contributions to vest”, the one Elon Musk oversees requires employees to have worked at Tesla for just one year.

Elon Musk explains to NBC journalist why Tesla hasn’t matched 401Ks in the past

Finance journalist Rob Kozlowski tweeted in early 2021 that Tesla had “skipped” a 401(k) match “for a third straight year”. He was summarising an article he’d written for Pensions & Investments.

NBC’s Stephanie Ruhle picked up the story, asking Elon Musk directly about his stance on 401(k) matching, and whether or not Tesla offered to match employees’ retirement investments.

Musk answered that, rather than receive contributions towards separate investment funds, “everyone at Tesla receives stock”. His compensation, he added, “is all stock/options”.

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Ruhle responded that the policy was “a win for all employees” and “a great way to keep everyone incentivised to be there and optimise productivity”.

The model, opined Electrek in 2020, made “a lot of employees and executives very rich”, and none more so than Elon Musk himself.

Do changes in the stock market affect 401(k) retirement plans?

Yes. Signing up for a 401(k) plan means paying a percentage of your salary into an investment account. 

It shifts the burden of saving for retirement onto employees, while at the same time offering them a degree of freedom to decide what they want to invest in.

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According to Investopedia, investment options offered by employers tend to include “an assortment of stock and bond mutual funds and target-date funds”. They might also include guaranteed investment contracts (GICs).

When share prices fall (as in a stock market crash), the people who own those shares see their portfolios shrink. For steps you can take to protect your 401(k) from a stock market crash, read Investopedia’s guide here.

PLEASE NOTE: Our publications do not offer investment advice and nothing in them should be construed as investment advice. The information contained in our publications is not, and should not be read as, an offer or recommendation to buy or sell or a solicitation of an offer or recommendation to buy or sell any securities.

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Bruno is a novelist, amateur screenwriter and journalist with interests in digital media, storytelling, film and politics. He’s lived in France, China, Sri Lanka and the Philippines, but returned to the UK for a degree (and because of the pandemic) in 2020. His articles have appeared in Groundviews, Forge Press and The Friday Poem, and most are readable on Medium or onurbicycle.com.