Although there have been reports of about one-third of employers cutting back on or eliminating 401(k) matches, for the most part, they have continued to add other features to the plans to increase participation and investment rates, Charles Schwab found. And that has helped most workers stay the retirement savings course.

In fact, of the plans that Schwab manages, participation increased in 2008 to 77%, up from 73% from the year before. Plans with between 500 and 1,000 participants displayed the highest participation rate (88%).

A majority of employers, 70%, continued to offer a 401(k) match in 2008, down from 78% in 2007. Of those that did offer a match, only 8% reduced it.

Sixty-two percent are now offering 401(k) advice, up from 58% in 2007. Lifecycle funds are now available in 65% of plans, up from 62%. Thirty-two percent of the 401(k) plans Schwab administers now automatically enroll participants, up from 24% in 2007, and 10% have automatic savings increases, up from 6%. Finally, 45% offer a Roth 401(k), up from 37% that did so the year before.

“Our plan sponsor clients remain committed to 401(k)s even though many of them are facing budget constraints across their businesses,” said Robin Alcorta, vice president of 401(k) plan services at Schwab. “While we are seeing some employers that have had to make cuts, including on the employer match, most have indicated that they intend to reinstate these features just as soon as they can.”

Catherine Golladay, vice president of 401(k) participant education and advice at Schwab, added: “Based on what we are seeing from participant behavior, the 401(k) continues to be a very important savings tool for many Americans.”

For their part, participants made little changes to their allocations, with the most significant change being a 4.52% decrease in assets from large-cap and a 2.28% decrease in assets from international holdings into stable value, whose assets increased an average of 2.9% and fixed income, which increased an average of 3.7%.

Hardship and loan activity also remains negligible, with only 0.55% of people taking hardship loans in the third and fourth quarters of last year and only 5.67% taking other types of loans from their 401(k).

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