Adding 401(k) Perks, But Not a Match

Employers are providing more 401(k) features. Fewer companies offer cash contributions.

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A growing number of employers are providing their workers with new 401(k) plan features, such as investment advice and more fund choices. But companies have been slow to resume or increase cash contributions to 401(k) plans.

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Nearly three-quarters (74 percent) of employers currently make 401(k) advice available to plan participants, up from 42 percent in 2005, according to an analysis of 1.5 million workers enrolled in retirement accounts administered by Charles Schwab. Most companies (75 percent) have added target-date funds to their list of investment choices.

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Employers are also increasingly adding automated features that encourage participation in their retirement plans. The proportion of employers that automatically enroll workers in the 401(k) plan jumped from 5 percent in 2005 to 38 percent in 2010. About the same number of employers (37 percent) automatically escalate the percentage of pay that workers save, up from 14 percent in 2006.

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An enhanced 401(k) match, however, has not been added to the retirement benefits offered. The number of employers offering a 401(k) match has fluctuated from a peak of 76 percent in 2006 to a low of 67 percent in 2009, Schwab found. Some 69 percent of employers were providing a 401(k) match as of June 2010.