If you’ve missed having 401(k) matches for the past year or longer, you’ll be happy to know the 80 percent of employers who suspended matches should have them restored by mid-2011. This news comes from the Profit Sharing/401(k) Council of America, which recently announced that in addition to the 40 percent who had already restored matches, another 40 percent are expected to do so in the coming months.
Restoring Matches a Top Priority
As noted in the announcement by David Wray, president of the Council, “Companies continue to make their 401(k) plans a top priority.”
As a result, those who suspended their matches are in the process of restoring them. Others, he explained, will be aggressive in restructuring their lineup of investments to ensure employees are getting the best options for their retirement portfolios.
One major reason employers are making matching contributions a bigger priority is because of the number of employees who slowed their own contributions as a result of suspended matches. The report from the Council found that of the companies that suspended matches, 78.1 percent reported their workers decreased participation in their own plans.
Because matches are a major motivator for employees to contribute, employers have found restoring their own contributions may work best in increasing participation again.
Employers Get More Involved in Plans
In addition to restoring plans, many companies have decided to dive deeper into the process. According to the Council, 94 percent of the 531 plan sponsors surveyed have a committee on hand to monitor fund performance. As a result, more than half changed their investment lineup over the past year, replacing poor performing funds with better options.
It’s evident employers are making greater attempts to create steady investment options for employees. This is not only a sign that the economy could be improving, but also that those who are looking to save for retirement may actually be able to create their nest egg effectively.