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Pension and Employee Benefits: Code, ERISA, & Regulations
This series provides an authoritative and comprehensive reference to the full text of benefits-related provisions of the Internal Revenue Code, the full text of ERISA, and related proposed and final regulations, as well as the official IRS and DOL preambles, and Committee Reports.
The current financial crisis has not significantly discouraged 401(k) contributions or participation, according to a survey of employers released by WorldatWork and the American Benefits Council. The survey, “Trends in 401(k) Plans,” found that 74% of employers reported no change in the employer matching contribution; 15% have either increased or are considering increasing the employer match; 8% have either decreased or are considering decreasing the 401(k) match, and 3% reported eliminating the match.
According to the survey, more than nine out of ten U.S. companies offer an employee 401(k) plan. In addition, despite the widely reported drop in account balances, two-thirds (66%) of organizations indicated that at least 70% of eligible employees participated in those 401(k) plans in 2008. “These statistics reflect that employers are clearly committed to providing retirement savings opportunities to their workers, even in tough economic times,” said Cara Welch, public policy director for WorldatWork.
Over 9 in 10 employers offer matches
The survey revealed that, in 2008, 94% of companies provided some type of employer match to the employee’s individual 401(k) contribution, compared to 93% when the survey was first conducted in 2002.
The most common employer matching contribution was three to four percent of a participant’s pay; the most common employee contribution was five to seven percent per paycheck. Most employers do not offer automatic enrollment in their 401(k) plans. The survey found that 44% of participating organizations offer automatic enrollment, while 56% do not.
More employees are taking loans
The impact of the shrinking economy and the reality of financial stress felt by Americans can nonetheless be seen in some employee behavior, the survey shows. Nearly half (49%) of companies surveyed report that employees are increasingly taking loans from their retirement accounts.
SOURCE: American Benefits Council press release, March 17, 2009.
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