Three-Fourths of Employers Have Not Touched 401(k) Match

A new survey by two workplace benefits groups found 74% of participating firms haven’t changed their 401(k) match.

Actually, slightly more employers reported having a match in 2008 (94%) compared to 93% when the survey was first conducted in 2002, according to a news release.

The joint survey by WorldatWork and the American Benefits Council also found that 15% have either increased or are thinking about upping their match; 8% have either decreased or are thinking about decreasing the 401(k) match; and 3% reported eliminating the match.

“These statistics reflect that employers are clearly committed to providing retirement savings opportunities to their workers, even in tough economic times,” said Cara Welch, public policy director for WorldatWork, in the news release. “401(k) plans serve a wide range of employers and a wide range of employees. Additional reform should encourage and build on this commitment and avoid creating new obstacles to plan sponsorship.”

According to the release, the most common match is 3% to 4% of a participant’s pay while the most common employee contribution is 5% to 7% per paycheck.

Some 49% of companies surveyed also report that employees are increasingly taking loans from their retirement accounts.

According to the survey, more than nine out of 10 U.S. companies offer an employee 401(k) plan. In addition, despite the widely reported drop in account balances, two-thirds (66 %) of organizations indicated that at least 70% of eligible employees participated in those 401(k) plans in 2008.

The survey was conducted in December among 505 WorldatWork members.

Other Studies

Earlier studies mirrored the latest survey’s results. A study released in February found 73% of plan sponsors said they planned to keep their hands off their 401(k) match (see “73% of Sponsors Plan No 2009 Match Changes).

A poll released in December 2008 found 83% of sponsors did not expect to change their match (see “Most Employers Don’t Plan to Reduce Contributions).

A PLANSPONSOR Webinar held last week explored the ways sponsors and their advisers could look for other potential cost-cutting areas before changing the match (see “What to Consider Before Cutting the Match).

Finally, a recent PLANSPONSORNewsDash survey found nearly two-thirds of respondents said they had not changed their match. However, an earlier version of the NewsDash poll taken in November found 16% had made no changes yet; that number dropped to 12.4% for the lastest survey (see “SURVEY SAYS – Changed Your Mind About the Match?“).