As 401(k) balances rebounded in 2010, the executives running defined contribution plans named retirement readiness one of their top priorities, according to the “10th Annual 401(k) Benchmarking Survey,” conducted by Deloitte and the International Society of Certified Employee Benefit Specialists (ISCEBS).

Plan sponsors are also looking for help from retirement plan service providers in helping their employees prepare for retirement.

However, only 15% of plan sponsors believe their employees will be prepared for retirement at the rate at which they are saving.

“While plan sponsors are concerned with the retirement readiness of their employees, they aren’t jumping at the chance to use the tools service providers are offering to manage this, according to our research,” said Stacy Sandler, a principal with Deloitte Consulting. “We believe retirement readiness will continue to be in the spotlight for years to come, as 401(k) account balance slowly rebound and participants become more educated regarding what they will need to retire.”

ISCEBS President Susan D. Cranston said, “401(k) balance shave slowly rebounded from the lows of 2008 and 2009. Nonetheless, surveyed participants indicated that they are taking a cautious approach to their 401(k) plans before diving back in to increase contribution rates and resuming the level of activity seen in prior years.”

While average balances increased, investors remain cautious. Thirty-nine percent of plan sponsors said the average account balance exceeded $75,000, up from 25% in 2009. However, 53% said their employees are taking a “wait and see” approach to the economy and investing.

And it appears that investors are taking out loans against their 401(k) and even cutting back on their contributions. The most common actions taken by participants over the past 12 months include increased loan activity (reported by 49% of plan sponsors), decreased deferral rates (41%), increase hardship withdrawals (40%), no changes (23%) and rebalancing portfolios to be less aggressive (21%).

Employers are also embracing matches once again. In 2010, 66% of the plan sponsors said they offer employer matching contributions, up from 59% in 2009. Among those companies that previous suspended such matches, 55% plan to reinstate them over the next 24 months.

More than half, 51%, offer either individual financial counseling or investment advice available to all participants. However, less than 5% offer retirement income products, and only 12% plan to add in-plan or at-retirement income options.