For employers that have reduced or suspended matches to defined contribution plans — or those contemplating action — surveys following the 2008-2009 crisis illustrate that reinstatement may not happen quickly.
"We learned it was a long recovery," said Catherine Collinson, president and CEO of the Transamerica Institute and Transamerica Center for Retirement Research, Los Angeles. "The good news was that employers didn't eliminate their plans."
Her organization looked at how employers' matches had changed since the 2008-2009 recession. Nine percent of employers reinstated a match that had been suspended, according to an October 2014 report. Five percent said they had suspended the match; another 5% had reduced the match.
The majority of respondents — 53% — kept the match the same, while 3% started a match and 5% increased it. Another 14% never had a match and 5% were not sure.
The survey also looked at what percentage of employers offered a match between 2007 and 2014. The highest rate was 80% in 2007, dropping to 69% during the 2009-2010 period. The rate rebounded to 77% in 2014.
Another post-crisis survey, published in October 2011, showed that most employers who reinstated a suspended match brought the match back at the same level.
Among 142 companies that reinstated the match, 105 retained the same level — an average of 3.39% of annual salary — said the survey by Towers Watson, the predecessor company of Willis Towers Watson PLC.
Thirty-two companies brought back the match at lower levels. The average contribution was 2.36% post-crisis vs. 4.5% pre-crisis.
Five companies reinstated the match at a higher level — an average of 4.3% post-crisis vs. 2.9% pre-crisis.
The report said these match percentages assume participants contributed enough money to get the maximum match.
The median duration of a match suspension was 12 months, the survey said.
However, another 60 companies in the Towers Watson survey still hadn't reinstated the match when the research was published.