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Data & Research December 17, 2010
Suspended 401(k) Matches Returning
Of the 14.8% of employers suspending their 401(k) match in recent years, 39.3% have restored them, and another 37.8% are planning to do so in the next six months.
Reported by PLANADVISER staff
That was the conclusion of a new study by the Profit Sharing/401k Council of America (PSCA) that indicated that more than 70% of companies didn’t touch their match, and 10% actually increased it.
“Companies continue to make their 401(k) plans a top priority,” said David Wray, PSCA President, in a release about the results. “Those that have suspended their matches are in the process of restoring them, and companies are aggressively restructuring their investment lineups.”
Employees also are continuing to contribute to their plans, with many increasing their contributions. While nearly 40% of companies reported no change to the number of employees making contributions, 31.6% indicated an increase. However, 78.1% of companies that suspended matching contributions (which remain suspended) reported a decrease in participation.
Also, the survey found that 94% of companies have a committee responsible for reviewing fund performance. More than half of plans changed their investment lineup in the last year as they replaced poor performing funds and increasingly scrutinized plan fees (72.2% of companies versus 55.4% in 2009).
The survey was conducted in October 2010 and reflects the responses from 531 401(k) and profit-sharing plan sponsors.
More information can be found at the PSCA’s Web site.