For the employers that suspended or reduced their matches in defined contribution plans, the coronavirus — which caused the economic havoc leading to cost-cutting — also looms over their efforts to reinstate these benefits.
"If companies can bring back the match, they will," said Gregg Levinson, the Philadelphia-based senior director of retirement at Willis Towers Watson PLC.
However, a new survey by his firm, conducted during the first half of June, shows that bringing back the match could take a long time for many companies. Fifteen percent of the 543 companies surveyed said they have suspended or reduced their match and another 10% said they are considering action. Seven percent have suspended non-elective contributions and another 7% are considering it.
Among those planning to reinstate any of these benefits, 34% had no set date for acting but will reinstate "at some point."
Three percent said the change could be permanent and 1% said the change is permanent. Eleven percent were not sure.
Among those with more definite timetables, 16% said they would act sometime this year, 32% cited the first or second quarter of 2021 and 3% cited the second half of next year.
Three recent 11-K statements illustrate the variance in sponsors' forecasts about their matches. Hewlett-Packard Enterprise Co., San Jose, Calif., reported that it would suspend its match July 1 through Dec. 31 and then reinstate the match. Allegheny Technologies Inc., Pittsburgh, said it suspended the match June 1 for a 401(k) plan covering salaried employees, adding that "company contributions will be deferred until no later than Dec. 31, 2021." Herman Miller Inc., Zeeland, Mich., announced in April a series of cost-cutting measures "including immediately suspending the employer matching contributions and employer core contributions included in this plan until further notice."