For the 401(k) matchless, finally a reason for optimism: Employer contributions to retirement accounts may soon make reappearance. Almost a quarter (24 percent) of employers that eliminated their 401(k) or 403(b) contributions plan to reinstate them within the next 6 months, up significantly from 5 percent of companies in June, according to a recent Watson Wyatt survey of human resources executives at 175 U.S. companies. Another 40 percent of employers plan to resume 401(k) matches within 18 months.
Most companies (67 percent) plan to restore the match to its previous level, but 21 percent will vary the match based on company profits. Only about 8 percent of the executives said their company no longer planned to contribute to retirement accounts, but 22 percent said they didn’t know when or if the match would return.
But it hasn’t been all good news for retirement savers over the past two months. Just over one-third of the companies surveyed have seen an increase in hardship withdrawals and loans from 401(k) or 403(b) plans since June. The executives largely said they don’t think workers will be able to retire comfortably at their desired retirement age. Some 83 percent of the employers are bracing themselves for an increase in the number of employees working past the traditional retirement age over the next 3 to 5 years.
For a few more reasons for retirement optimism, see:
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Muser of NM 9:45PM August 17, 2009