Employers are clearly more optimistic about the economy, for another 40% that had suspended 401(k) contributions will resume them by mid 2011, doubling the 40% that already have resumed suspended or reduced matches, the Profit Sharing/401(k) Council of America announced Friday.
Overall, however, the vast majority of 401(k) plans did not suspend or reduce their matches, the council found. More than 70% made no change to matching contributions, and nearly 10% actually increased them in the past three years.
Since 2008, only 14.8% suspended matching contributions.
“Companies continue to make their 401(k) plans a top priority,” said David Wray, president of the Council. “Those that have suspended their matches are in the process of restoring them, and companies are aggressive restructuring their investment lineups.”
Employees are also continuing to contribute to their plans. Nearly 40% of companies said their workers have made no changes to their contributions, but 31.6% said their workers have increased their contributions. However, among those companies that suspended matching contributions, 78.1% said their workers have decreased participation in their 401(k) plan - indicating how powerful a motivator company matches are.
And plan sponsors have become more involved, too, with 94% having a committee to monitor fund performance, and more than half changing their investment lineup in the past year, replacing poor performing funds with better choices. And 72.2% said they have scrutinized their plan’s fees, up from 55.4% that did so in 2009.
The findings are based on a survey of 531 plan sponsors around the country in October.