New York — Nov. 2
The majority of U.S. employers that suspended their 401(k) plan matching contributions during the economic downturn have since restored them, according to new analysis by Towers Watson, a global professional services company.
According to the analysis, 75 percent of 260 employers that suspended their 401(k) matching contributions have now restored them. Among those employers, about 74 percent reinstated the matching contributions to their previous level, while 23 percent of employers restored them at a lower rate. Just 3 percent increased their matching contributions to a higher rate. The most frequent employer match formula before and after the suspension matched 50 percent of employees' salary deferrals, up to 6 percent of pay.
The median duration for match suspensions was 12 months.
“Many employers are making it a priority to contribute to their workers’ retirement accounts,” said Robyn Credico, a senior retirement consultant at Towers Watson. “Employers understand the importance of helping and encouraging their employees to save for retirement.”
The Towers Watson analysis is based on 260 organizations of all sizes that suspended their matching contributions. The suspensions occurred from 2008-2010, though most (83 percent) occurred during the first half of 2009.
Source: Towers Watson