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Towers Watson: Most U.S. Employers Have Restored 401(k) Matching Contributions


Posted on 02 Nov 2011

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The vast majority of U.S. employers that suspended their 401(k) plan matching contributions during the recent economic downturn have since restored them, according to new analysis by Towers Watson, a global professional services company.

According to the analysis, 75% of 260 employers that suspended their 401(k) matching contributions have now restored them. Among those employers, about three in four (74%) reinstated the matching contributions to their previous level, while 23% of employers restored them at a lower rate. Just 3% increased their matching contributions to a higher rate. The most frequent employer match formula before and after the suspension matched 50% of employees' salary deferrals, up to 6% of pay. The median duration for match suspensions was 12 months.

“Many employers are making it a priority to contribute to their workers’ retirement accounts,” said Robyn Credico, a senior retirement consultant at Towers Watson. “Employers understand the importance of helping and encouraging their employees to save for retirement. With 401(k) plans now the primary retirement savings vehicle for most workers, it is very encouraging to see that the vast majority of employers have reinstated their matching contributions.”

About the Analysis

The Towers Watson analysis is based on 260 organizations of all sizes that suspended their matching contributions. The suspensions occurred from January 2008 through January 2010, though most (83%) occurred during the first half of 2009.


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