Companies Start Matching 401(k) Funds Again
BOSTON ( TheStreet) -- After two years of focusing on the bottom line, companies that stopped matching employees' 401(k) contributions plan to restore the benefit this year.
Earlier this month, human resources consultant Hewitt Associates (HEW), released the results of a survey of 162 mid- to large-sized U.S. companies, representing a pool of 5.7 million employees. Among companies that suspended or reduced matching retirement contributions last year, 80% plan to restore them this year.
Many companies are taking steps to ensure that retirement plans are strengthened, seeing the benefit as crucial to a productive workforce and employee retention. Only 54% of employers who took part in the survey said they were confident about their workers' ability to retire with sufficient assets, down from the 66% in 2009, according to the Hewitt survey.
According to the Pension Rights Center, a consumer organization that tracks retirement issues, at least 310 companies have suspended 401(k) matches, at least temporarily, since 2009. Among them are American Express (AXP), JPMorgan Chase (JPM), Xerox (XRX), FedEx (FDX), J. Crew Group (JCG), Hewlett-Packard (HPQ), Macy's (M), Sprint Nextel (S) and Saks (SKS)."It was obviously a tough year," says Pamela Hess, Hewitt's director of retirement research. "Companies certainly had a lot of competing priorities, but still 401(k) plans are a big focus. A lot of companies have already announced their reinstatements and a lot of others will follow suit later in the year." Hess says companies never intended for suspended matches to be permanent and that most saw them as a "short-term measure that was better than further layoffs or pay cuts."
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