Most employers kept their defined contribution matching contributions intact following the financial crisis of 2008, according to a survey by the American Benefits Institute and WorldAtWork.
Among companies offering matches, the survey found 88% didn't suspend or eliminate the contributions in the last five years. This result shows “employers are committed” to the success of 401(k) plans, Cara Woodson Welch, vice president of policy and public affairs for WorldatWork, said during a telephone news conference Wednesday. WorldatWork is a non-profit human resources association.
Based on interviews with plan executives in late 2012, the survey also found that 8% of sponsors suspended matches and hadn't restored the contribution. Four percent suspended or eliminated the match, then partially restored the contribution, the survey said. In addition, 1% of plans eliminated the match and completely restored it. Percentage doesn't total 100% due to rounding.
Despite efforts to maintain a corporate match, plan executives said few participants take full advantage of it. Only 9% of executives said more than 90% of employees contributed enough to receive the full match, while 66% said at least half of their participants contributed enough for the full match.
“The flip side of this figure is that the remaining 34% believe that more than half of their plan participants are 'leaving money on the table' by not contributing enough to take advantage of the full employer match,” according to the survey.
“We know people are participating; there's room to do more,” Lynn Dudley, American Benefits Council senior vice president for retirement and international benefits policy, said at the news conference. The American Benefits Institute is the research and education affiliate of the council.
The online survey of 476 plan executives was conducted in November and December.
