Of the companies that have suspended matching contributions to their 401(k) plan, nearly half, 46.7%, have either already reinstated the match or plan to do so in the first quarter of 2010, the Profit Sharing/401k Council of America found. Among large companies, 52.7% have restored the match or plan to do so.
Overall, 76.8% of companies match their employees’ contributions, the council found. In addition, the majority of participants continued to participate in their employer’s plan and maintained deferral levels.
More plan sponsors suspended or reduced non-matching company contributions than matching contributions and more large companies with more than 5,000 participants than small companies suspended contributions.
The data also revealed a clear correlation between availability of matching company contributions and participation rates; 72.9% of companies that suspended their match experienced a decrease in plan participation versus only 14.4% of those companies that maintained matching contributions.
And overwhelmingly, plan sponsors stepped up to help their participants understand market volatility, with 54.3% increasing their employee education efforts. The council said, “It is impressive that companies not only stepped up their support of participants while facing fewer resources, but they evaluated the specific needs of their employees and customized their support to meet those needs.”