Study finds 401(k) matches back at pre-crisis level

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CHICAGO — 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 participants and employers alike, said Steve Anderson, the 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 include:

• 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 it services, according to Anderson.


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