The real importance of these findings is that the 401(k) plan system is an integral part of our retirement system in this country
Washington (PRWEB) March 18, 2009
A new survey of employers released by WorldatWork and the American Benefits Council, “Trends in 401(k) Plans,” and presented today at a National Press Club Newsmaker press conference in Washington, DC, finds that the financial crisis has not significantly discouraged 401(k) contributions or participation. A full 74 percent of employers reported no change in the employer matching contribution; 15 percent have either increased or are considering increasing the employer match; eight percent have either decreased or are considering decreasing the 401(k) match, and three percent reported eliminating the match.
According to the survey, more than nine out of ten U.S. companies offer an employee 401(k) plan. In addition, despite the widely reported drop in account balances, two-thirds (66 percent) of organizations indicated that at least 70 percent of eligible employees participated in those 401(k) plans in 2008.
“These statistics reflect that employers are clearly committed to providing retirement savings opportunities to their workers, even in tough economic times,” said Cara Welch, public policy director for WorldatWork. “401(k) plans serve a wide range of employers and a wide range of employees. Additional reform should encourage and build on this commitment and avoid creating new obstacles to plan sponsorship."
Nevertheless, the impact of the shrinking economy and the reality of financial stress felt by Americans can be seen in some employee behavior. Nearly half (49 percent) of companies surveyed report that employees are increasingly taking loans from their retirement accounts. “The real importance of these findings is that the 401(k) plan system is an integral part of our retirement system in this country,” said Lynn Dudley, senior vice president, policy, for the American Benefits Council. “Our study shows it remains both strong and popular.”
Other Key Findings
- In 2008, 94 percent of companies provided some type of employer match to the employee’s individual 401(k) contribution, compared to 93 percent when the survey was first conducted in 2002.
- The most common employer matching contribution is three to four percent of a participant's pay; the most common employee contribution is five to seven percent per paycheck.
- Forty-four percent of participating organizations offer automatic enrollment in 401(k) plans; 56 percent do not. President Obama's FY 2010 budget included proposals for mandatory automatic payroll-deduction into workplace plans or individual retirement accounts.
About the Survey
This survey was conducted in December 2008 by WorldatWork, in collaboration with the American Benefits Council. Surveys were sent electronically to a random representative sample of 4,938 U.S. WorldatWork members. A total of 505 members participated in this survey during a two-week period, generating a 10-percent response rate.
WorldatWork is a global human resources association focused on compensation, benefits, work-life and integrated total rewards to attract, motivate and retain a talented workforce. Founded in 1955, WorldatWork provides a network of more than 30,000 members and professionals in 75 countries with training, certification, research, conferences and community. It has offices in Washington, D.C. and Scottsdale, Arizona.
About American Benefits Council
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.
Director, Communications, American Benefits Council
PR Manager, WorldatWork
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