Many U.S. employers are increasingly losing confidence in their workers’ ability to save for retirement and, as a result, plan to step up efforts to help workers maximize 401(k) savings, starting by reinstating the match, Hewitt Associates found. In fact, 80% of companies that suspended or reduced their company match are planning to restore it this year.
In addition, employers are adding automated tools and investment features, Hewitt found in a survey of 162 mid- to large-sized companies with 5.7 million employees. Forty-six percent are very or somewhat likely to add automatic rebalancing tools to their plan in 2010 to keep workers’ portfolios within their target allocations.
Fifty-one percent currently offer online investment guidance, and 42% are very or somewhat likely to do so in 2010. And 28% currently offer managed accounts that permit workers to delegate the overall management of their accounts to an outside professional, and 25% are very or somewhat likely to offer managed accounts in the coming year.
Fifty-four percent of the employers said they are less confident in their workers’ ability to retire with sufficient assets, down substantially from 66% who were confident in 2009. And only 18% are very confident about their employees’ ability to have enough retirement income to last throughout their retirement years.
“In the last 18 months, employees’ 401(k) accounts took a serious financial hit due to the severe market downturn,” said Pamela Hess, director of retirement research at Hewitt. “While there has been marked growth in 401(k) balances since the market recovery began, we still see too many workers not saving and investing in a way that will help them achieve their retirement goals. Employers are trying to do their part to help.”