A piece of good news on the 401(k) front.
A new survey of employers released today by WorldatWork and the American Benefits Council finds that the economic crisis hasn't significantly dampened 401(k) contributions ... or participation.
The study, which covers the practices of 505 organizations, finds that 74% of employers reported no change in their employer matching contribution. 15% have either increased or are considering increasing their employer match. 8% have either decreased or are considering decreasing their match. 3% reported eliminating the match.
And despite the hit that account balances have taken, two thirds (66%) of participating employers indicate that at least 70% of their eligible employees participated in the plans in 2008.
According to Cara Welch, public policy director for WorldatWork:
These statistics reflect that employers are clearly committed to providing retirement savings opportunities to their workers, even in tough economic times. 401(k) plans serve a wide range of employers and a wide range of employees. Additional reform should encourage and build on this commitment and avoid creating new obstacles to plan sponsorship.
Other key findings from the study include:
-
In 2008, 94 percent of companies provided some type of employer match to the employee’s individual 401(k) contribution, compared to 93 percent when the survey was first conducted in 2002.
- The most common employer matching contribution is three to four percent of a participant's pay; the most common employee contribution is five to seven percent per paycheck.
- Forty-four percent of participating organizations offer automatic enrollment in 401(k) plans; 56 percent do not. President Obama's FY 2010 budget included proposals for mandatory automatic payroll-deduction into workplace plans or individual retirement accounts.
Lets see now if we have all three legs of the stool to provide retirement income:
-- Social Security
-- personal savings
-- company retirement plan
Well, Social Security seems to be plugging along, even though we always get people claiming the sky is falling because of the baby boomers reaching retirement age.
Personal savings is a little iffy since the stock market is so low and house prices are so depressed.
Company retirement plans continue to be a shaky leg. Pension plans have disappeared, and company 401k contributions are very small due to the stock market.
So all-in-all, the only ones with a solid retirement foundation must be the AIG employees!
Posted by: Paul Weatherhead | March 17, 2009 at 02:43 PM
Paul:
Ha!
Posted by: Ann Bares | March 17, 2009 at 03:13 PM