The Towers Watson analysis included 260 companies that had made changes to their match contributions as a result of the economic crisis – 231 suspended their match policy, while 29 chose to reduce them.
Of the 231 companies that suspended the match, 75% have reinstated it. Of them, 74% brought back the original match amount (the most frequent match formula being 50% of up to 6% of salary), and 23% of companies reinstated the match at a reduced amount, most commonly to about half of the original match. And a few companies (3%) reinstated a higher match, increasing the formula by an average 1.4 percentage points. In all but one of these cases, the increase was associated with a pension close or freeze, and the higher match was intended to make up for some of the lost DB plan benefits.
Of the 29 organizations that reduced their match rather than suspending it outright, 31% have since reinstated their pre-reduction match formula. Of these companies, the median duration of the temporary lower match rate was 12 months. Where the reduced formula remains in effect, the match was reduced by an average of 2.19 percentage points.
Forty percent of companies in the Towers Watson analysis reinstated their matching contribution by the beginning of 2010. The second-largest wave of reinstatements was in early 2011.The median duration for match suspensions was 12 months, for companies with quantifiable dates. Most companies reinstated their match after nine or 12 months.
Among industries, manufacturing and health care had the highest reinstatement rate, at 88%, and entertainment had the lowest reinstatement rate, at 50%. With the exception of the entertainment, financial and publishing industries, reinstatement rates exceeded 70% for all sectors.
Reinstatement data were unavailable for 26 of the 231 companies that originally suspended their match.