Most employers restore 401(k) match: Analysis
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Most employers that suspended their 401(k) plan matching contributions during the most recent economic downturn have restored them, according to a new analysis.
Seventy-five percent of employers that suspended their matches have now restored them, according to a Towers Watson & Co. study published last week.
The suspensions occurred from January 2008 through January 2010, though most—83%—occurred during the first half of 2009, which was the peak of the Great Recession.
Among employers that reinstated their match, 74% restored the match they had in place prior to the suspension. The most frequent match before and after the suspension was one in which employers matched 50% of employees' salary deferrals, up to 6% of pay, New York-based Towers Watson said.
Additionally, 23% of employers that restored their matching contributions did so at a lower rate prior to the suspension.
Just 3% of organizations restored matching contributions at a rate higher than before the suspension.
The median duration of suspension was 12 months.
The analysis is based on 205 organizations of all sizes that suspended their matching contributions.
Big, well-known employers included in the analysis that suspended and later restored matching contributions include Micron Technology Inc., a Boise, Idaho-based semi-conductor manufacturer, which, effective Jan. 1, 2011, after its March 2009 suspension, boosted its matching contribution to 100% of employees' deferrals, up to 5% of pay from 4% of pay; and package delivery giant FedEx Corp. of Memphis, Tenn., which, effective Jan. 1, 2011, fully restored its matching formula, in which it matches 100% of employees' deferrals on the first 1% of pay and 50% of deferrals on the next 5% of pay.
