Suspending 401(k) matches for just one year can save most companies millions of dollars a year, but doing so can severely negatively impact participants' savings rates and long-term retirement outlook, and should be avoided, according to Hewitt Associates.

On average, employers save $1,500 per employee a year by ceasing the match, assuming a match of 50 cents on the dollar for the first 6% contributed. Large companies can save an average of $25 million a year, medium-sized companies $10 million and small companies $2 million.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.