Employer Matches of Roth 401-k Contributions

More and more employers these days are offering Roth 401(k)’s since their implementation in 2006. It's a great option, especially if you are young and have a long horizon before having to use your retirement savings.  

Tax professionals will probably say this is too much of an overstatement, but I generally think putting money in a Roth account (either 401-k or IRA) is better than pre-tax traditional 401-k/IA contributions for younger people.  The way I look at it, the tax situation doesn’t even matter because giving the money in those accounts the extra decades to grow tax free way outweighs the tax hit we are taking right now for contributing after tax money rather than before tax money to a traditional 401-k or IRA.  I'm under 35 though, so my situation may be completely different than yours.  

In any event, let's say you're in a position that you both have a Roth 401-k option and are fortunate enough that your company also matches 401-k contributions (Roth or traditional).  (By the way, also be grateful if your company does match because I have worked at a lot of places that had no match whatsoever or else the vesting period is so long it's useless for someone in the beginning of their career).  

One issue that can come up and I have seen people asking about on other blogs is whether company matches are pre or post-tax if you have a Roth 401-k.  The answer is that employer contributions are ALWAYS pre-tax, no matter if you have a traditional or Roth 401-k account.  If you have a Roth 401-k (like I do), then they put the employer contribution in a separate (traditional 401-k) account for you.  It has to do with tax benefits for the company.

It would be great if the contribution would go into the Roth 401-k, but alas, not the case.  That would also bring up the interesting issue of whether the employer would put in the match percentage on a pre-tax or post-tax basis (i.e. 3% of your pre-tax or post-tax salary).  The latter would also be too good to be true.