Study finds 401k matches back at pre-crisis level

DAVE CARPENTER, AP Personal Finance Writer

Tuesday, August 28, 2012

CHICAGO (AP) — More companies are now offering a 401(k) match to their employees than were before the 2008 financial crisis, when many dropped it under duress, according to new data by Charles Schwab Corp. released Monday.

An increasing number of employers also are providing financial advice to 401(k) participants, Schwab found.

The figures are based on a study of the accounts of Schwab’s approximately 1.5 million 401(k) plan participants, offered through about 1,000 employers.

The study found that 73 percent of the companies provided a 401(k) matching contribution as of the end of 2011. That was up from 67 percent in 2009 and 68 percent in 2010 and more than the 72 percent of 2008.

The bounce-back is a healthy sign for plan participants and employers alike, according to Steve Anderson, head of Schwab Retirement Plan Services.

“Companies recognize that it’s an important benefit,” he said. “As they gain greater success with their financials, they’re reinstating the match.”

Other findings from the study:

— 83 percent of employers made 401(k) advice available to plan participants, virtually doubled from 42 percent in 2005.

— 42 percent of the companies automatically enrolled employees in their 401(k) plans versus just 5 percent six years earlier.

— 40 percent of the employers who used automatic enrollment also used automatic savings increases, increased from the low of 14 percent in 2006, soon after the concept originated.

The results show that employers are responding to evidence that advice and other plan features can make a positive difference in their workers’ retirement accounts, Anderson said. Recent Schwab data found that employees who use independent professional advice services inside their 401(k) plans have tended to save twice as much, were better diversified and stuck to their long-term plans better than those who don’t.

Since the middle of last year, Schwab also has seen a steady increase in hiring among the plans that it services, according to Anderson.

More like this story

bertd 8 months, 3 weeks ago

This is very good news for US workers. I had no idea that over 70% of workers had access to a 401k plan that includes company matching funds. This gives most Americans no excuse for not saving for retirement. Anyone who can afford the luxury of satellite/cable TV, a data plan on their cell phones, $5/pack cigarettes, etc., can divert spending for luxury items into 401k contributions. On top of their money they get the benefit of company matching money.

spelchek 8 months, 3 weeks ago

All that individual responsibility talk....pfffffffttttt.....

I saw a guy on a cell phone worth more than the uninsured car he was driving. True story.

Littleinvestor 8 months, 3 weeks ago

Spel, don't doubt your story. I drive a vehicle daily that has 200,000+ miles on it. It is insured, though. I'll trade it when the repair bills start approaching what payments on a new or newer one will be. I've got a pretty nice cell phone. But bertd is right. Everyone can save something for their old age, even if it is just 25 cents a week for 40 years. I learned that from my grandparents, who managed to do it during the Great Depression and continued until Grandad retired in the late 1950s. They bought a house for cash and moved to town from the farm and never wanted for anything they NEEDED until the day they died. Too many people can't keep their hands off the money when they see it piling up and they often spend it on something they want, not something they need. Too many Americans are like dogs, they live in the moment, and never plan for the future.

jeffcitygirl 8 months, 3 weeks ago

Some people have to spend that little bit they saved up for their kids school supplies...emergency dental work or doctor bills... saving is HARD when you don't make a living wage to support your family, or lost your good paying job due to the economy and had to take one that pays much less just to get insurance benefits. Back in your grandparents days I bet milk wasn't $4 a gallon eitehr!

newone 8 months, 3 weeks ago

Milk may not have been $4 a gallon but their pay wasn't as high as it is now either, .50 cents a gallon during the depression was as bad as $4 a gallon now,people now day's do not know how to do go without, growing up their were so many times we didn't have cable TV, we didn't go out to eat EVER, we didn't have cell phones, we didn't get the paper, we didn't have internet, we didn't have a nice car, when we bought food it was the basics, we didn't even get milk, we had to drink powdered milk, I will be anything that I could come into your family and look at your finances and find at least 5 things to cut from your budget that you do not need to survive each day, it can happen it's just that people don't want to do it.

JCLifer 8 months, 3 weeks ago

Wonder if state government employees will ever get their little $25/month match restored?

RobHunterJohnson 8 months, 3 weeks ago

Spck a car is worth over $400.00 as JUNK, so nice retoric, but I do not buy it. ROB

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