Several finance and insurance companies have led the charge in increasing their matching contributions to workers’ 401(k) plans in response to the new tax law, and their early responses might just be the beginning.

Nationwide Mutual Insurance Co., Aflac Inc., Sun Trust Banks Inc., and Visa Inc., which all hail from the finance and insurance sector, all recently announced increases to their matches for employee 401(k)s in response to the tax bill signed into law by President Donald Trump Dec. 22. The increases to their already generous plans may prompt other companies to think long term when responding to the new law.

American Express Co., for example, told Bloomberg Law it will be talking about its response to the new tax law and what it means for employees during an investor call Jan. 18.

“I do think when it comes to employee benefits, the finance sector will push the envelope a little bit” by enhancing their benefits, Will Hansen, senior vice president of retirement and compensation for the Employee Retirement Income Security Act Industry Committee (ERIC), told Bloomberg Law. ERIC is a national organization that exclusively represents large employers on benefits issues.

Companies from the finance and insurance sector have also led the way with benefits like student loans assistance and paid parental leave, he said. Wall Street and telecom giants led the way in introducing parental leave benefits several years ago, nearly doubling the amount of companies offering parental leave in 2015.

Generous Industry

The finance industry is generally ahead of the curve when it comes to matching workers’ 401(k) contributions.

Meghan Murphy, vice president of thought leadership at Fidelity Investments, told Bloomberg Law the average percent of employee contributions to a 401(k) that companies apply their match to is 4.4 percent among plans Fidelity manages.

The average match for the finance and insurance industry is 5.2 percent, Murphy said.

To put that in context, among the plans Fidelity manages, the average percent a company will match in other sectors are 4.2 percent in technology, 4.6 percent in manufacturing, 6.1 percent in energy production, and 7.6 percent in airlines. Averages weren’t available for the company match rates, but a common plan Murphy said she sees is 50 percent matching on 6 percent employee contributions.

The new law is saving companies money and “they’re turning around and investing the money in their own workforce,” she said.

“Increasing an employer match is an immediate benefit, and it’s also a benefit down the road in retirement,” Murphy said. Most employees take full advantage of the amount their employer will match, contributing the full amount of the cap to their 401(k).

Bonuses v. 401(k) Matches

Many employers, including those in the finance sector, have responded to tax reform by giving savings back to employees in the form of one-time bonuses, typically in an amount of about $1,000.

Employee bonuses have come from several airlines, including American Airlines Group Inc., Southwest Airlines Co., and JetBlue Airways Corp., and a few finance companies such as PNC Financial Services Group Inc., Bank of America Corp., U.S. Bancorp, and Nationwide Insurance. Wal-Mart Stores Inc., Comcast Corp., and AT&T Inc. have also paid out bonuses.

In the long term, the lump-sum bonuses are less lucrative than the long-term 401(k) match increases, especially those increases that have come in the financial sector, Ary Rosenbaum, a retirement plan attorney from the Rosenbaum Law Firm PC, told Bloomberg Law in an email.

The companies that have changed their 401(k) matches are likely choosing to increase their contribution because “it would benefit their employees in the long run if they increase the match instead,” Rosenbaum said.

“It’s also more cost effective than a lump sum bonus since they won’t make a contribution to those employees who don’t defer,” he said.

Employee Response

Visa’s workers have responded positively to the increased 401(k) match, a Visa spokesperson told Bloomberg Law.

Visa, which gives $2 for every $1 employees contribute to their retirement account, increased the percent of employee contributions it applies its match to from 3 percent to 5 percent in response to the changes under the tax bill.

The increase, which takes effect in February, was announced internally the week before before it became public to allow employees to ask questions, the spokesperson said. The company made the change in an effort to promote retention and think long term, the spokesperson said.