Nearly half of U.S. employers with at least 1,000 workers have dropped or are planning to eliminate contributions to their 401(k) plans, according to a Diversified Investment Advisors survey.
Twenty-four percent of the companies surveyed said they have eliminated employer contributions to their 401(k) plans, while another 22% said they plan to do so this year.
Another 35% have reduced their 401(k) contributions, and 17% plan to follow suit this year.
Thirty-two percent said they have increased contributions, and 19% said they were planning to raise contributions in 2009. (Many companies have multiple 401(k) plans and the changes might not be uniform across all their plans.)
Laura White, vice president of marketing at Diversified, noted that although many employers have had to scale back or eliminate their 401(k) contributions, many are contributing to their employees’ retirements in other ways by maintaining multiple retirement platforms. For example, of the companies offering 401(k) plans, 46% also offer a 401(a) plan, 87% offer a traditional defined benefit plan and 51% have a cash balance plan, she said.
Diversified’s “Report on Retirement Plans—2009,” is based on a survey conducted during the first quarter.