Hewitt: The Match Is Back

February 08, 2010 at 07:00 PM
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Many large and midsize U.S. employers will be doing more to help workers maximize 401(k) savings this year.

Consultants at Hewitt Associates Inc., Lincolnshire, Ill., have published figures supporting this conclusion in a summary of results from a recent survey of 162 large and midsize U.S. employers.

The employers have a total of 5.7 million employees.

The Hewitt consultants found that:

- Only 54% of participating employers are confident about workers' ability to retire with enough assets, compared with 66% in 2009.

- Only 18% are very confident about their employees' ability to have enough retirement income to last throughout their retirement years.

In 2009, many employers suspended or reduced company efforts to match employees' retirement plan contributions.

About 80% of the employers that suspended or reduced the match in 2009 said they plan to restore the match this year, Hewitt consultants report.

Many of the employers also are trying to make investing in 401(k) plans easier, by adding automated tools, the consultants found.

- 59% of the employers offer automatic enrollment, up from 51% in 2009.

- 78% of the employers offer target-date fund options, up slightly from 77% in 2009.

- 46% of the employers that do not already offer automatic rebalancing–a tool that helps employees regularly balance their portfolios with their target allocations–are "very" or somewhat likely to add that feature to their plans this year.

- 38% said they are very or somewhat likely to add automatic contribution escalation, which gives employees the ability to choose to have contribution rates increased automatically over time.

"In the last 18 months, employees' 401(k) accounts took a serious financial hit due to the severe market downturn," Pamela Hess, a Hewitt retirement research specialist, says in a statement about the survey results.

"While there has been marked growth in 401(k) balances since the market recovery began, we still see too many workers not saving and investing in a way that will help them achieve their retirement goals," Hess adds. "Employers are trying to do their part to help, which is why they are restoring their matching contributions and offering features and tools that push workers to save more throughout their working years."

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