Most Employers Don’t Plan Contribution Reduction

A survey by Mercer found that 73% of organizations globally do not plan to reduce the level of employer contributions to defined contribution plans in the remainder of 2009, while 14% of have already done so in the past six months

To date, a third have reviewed their overall investment menus (32%) and reviewed both investment and administrative fees (33%), while 43% are likely to take these actions by year-end, according to a news release from Mercer about its latest Leading Through Unprecedented Times global survey.

Regarding defined benefit plans, 37% of organizations plan to get a better understanding of, and take actions to mitigate the risk inherent in these plans, according to the news release. Within the six months prior to the survey, 34% have already done so.

Looking ahead, organizations are more likely to change their DB plan investment strategy to reduce risk (38%) rather than change the funding policy (25%). Fourteen percent and 12%, respectively, have already taken those steps. Only 16% of organizations are likely to cut back or stop accruals in the remainder of the year, while 10% have already done so.