401(k) Matches Restored by 75 Percent of Companies

Three-fourths of employers who suspended their 401(k) matches during the economic downturn have restored them, according to a survey by Towers Watson.


The professional services company surveyed 260 mid-sized to large employers that had stopped making matches.

Among the 75 percent that restored their contributions, 74 percent returned to their previous match level. Twenty-three percent brought their matches back at a lower percentage of pay. Three percent increased their contributions to a higher rate than before.

Towers Watson said most employers that offer 401(k) contributions match 50 percent of their employees’ salary deferrals, up to 6 percent of pay.

The survey found that the median length of time that company matches were suspended was 12 months. It tracked suspensions that occurred from January 2008 through January 2010 and found that 83 percent started in the first half of 2009.

Robyn Credico, a senior retirement consultant at Towers Watson, noted that 401(k) plans are the primary retirement savings instrument for most workers and that “it is very encouraging” to see the match reinstatements.

Source: http://www.kansascity.com/2011/11/03/3245855/401k-matches-restored-by-75-percent.html