The match is back — but is it enough to boost 401(k) contributions?
Despite some positive economic signs, many employees are reluctant to begin making sizable contributions to their 401(k) plans again. Result: More employers are taking action to encourage them.
One thing companies are doing to boost employee participation in their retirement plans: reinstating the 401(k) match.
In fact, a recent Hewitt Associates survey of mid- to large-sized organizations found that 80% of employers that reduced or suspended their 401(k) match last year are planning to restore it in 2010.
That’s a huge increase from the findings in an earlier Fidelity Investments survey about companies that had suspended their 401(k) match.
Employers are also looking to automatic enrollment to help bolster participation rates. Hewitt found that 59% of companies now offer automatic enrollment — that’s an 8% increase from the 51% that offered this feature in 2009.
In addition, 27% of firms that don’t currently offer this feature are “very or somewhat likely” to add automatic enrollment this year.
What has your company done to boost employee participation in its 401(k) plan? Share it with us in the Comments section.
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