Twenty-six percent of defined contribution plan executives surveyed reduced or suspended corporate matches to retirement plans in 2009.
Among the 411 respondents, 107 halted or reduced their corporate matches last year, confirmed Erica O’Malley, national employee benefit plan practice leader for Grant Thornton LLP, a survey co-sponsor. Of that 107, 53% are undecided on reinstating the match this year, and 33% won’t reinstate the match this year, the survey said.
“The recent economic challenges have certainly affected the funding — including employer and employee dollars — of defined contribution plans,” Debbie Smith, an employee benefits practice partner with Grant Thornton, said in a news release. “The fact that one-fourth of employers have taken significant measures to adjust contribution plans is quite telling of the times.”
One-third of all, respondents said their participants decreased contributions during 2009, the survey said.
In another question, 52% of 425 respondents said they “moderately understood” their plan fees while 44% said they were “confident that they fully understand all of them,” the survey said.
Fifty-six percent said their participants had “little or no understanding of how fees affect their account balances,” while 40% said their participants had a “moderate understanding” of fees.
The sixth-annual survey of DC plan executives — sponsored by Grant Thornton, retirement plan consultant Plan Sponsor Advisors and the law firm of Drinker Biddle & Reath — was conducted online from November 2009 to January 2010.