Regardless of Americans’ commitment to 401(k)s more than 30 percent of employers have reduced or eliminated matching contributions to defined contribution plans since January 2008.
Spectrum Group’s new report “Plan Sponsor Attitudes at the End of a Tumultuous Year” released Wednesday also finds 29 percent of plan sponsors (150 plan sponsors surveyed) will reduce or eliminate matching contributions over the next 12 months.
“The economic crisis has taken a significant toll on matching contributions to defined contribution retirement plans. One-third of plan sponsors have either reduced or eliminated them entirely, and 29 percent intend to do so over the next 12 months. This, combined with a decline in deferral rates, raises questions about the ability of the current generation of working Americans to adequately fund their retirements,” said George H. Walper, Jr., president of Spectrem Group in a statement.
Twenty percent of employees participating in defined contribution plans have decreased their deferral rates, the percentage of earnings they contribute to the plans, with another 5 percent intending to do so over the next 12 months.
Which employers are making contribution cuts to 401(k)s? The list keeps growing. Find out here courtesy the Pension Rights Center.