Many U.S. employers are increasingly losing confidence in their workers’ ability to save for retirement and, as a result, plan to step up their efforts this year to help workers maximize their 401(k) savings, according to a new survey by Hewitt Associates, a global human resources consulting and outsourcing services company. High on employers’ priority lists in 2010: restoring company 401(k) matches that were suspended or reduced during the market downfall and adding automated tools and investment features that take the guesswork out of saving and investing.

Hewitt’s study of 162 mid- to large-sized U.S. companies representing 5.7 million employees reveals employers today (54 percent) are less confident about their workers’ ability to retire with sufficient assets than they were in 2009 (66 percent). In addition, less than one in five (18 percent) say they are very confident about their employees’ ability to have enough retirement income to last throughout their retirement years.

To help employees meet their financial goals in retirement, Hewitt’s survey found that 80 percent of companies that suspended or reduced their company match in 2009 are planning to restore it in 2010. In addition, Hewitt’s survey showed a continued emphasis among employers on automating 401(k) plans to help workers maximize the benefits of their retirement plans. Almost half (46 percent) of employers that do not already offer automatic rebalancing - a tool that helps employees regularly balance their portfolios with their target allocations - are very or somewhat likely to add it to their plan in 2010. Nearly four in ten (38 percent) are very or somewhat likely to add automatic contribution escalation - where employees can elect to have their contribution rates increased automatically over time.

An increasing number of employers are also offering investment services and tools to help employees make better investment and savings decisions. Half (51 percent) currently offer online investment guidance and another 42 percent are very or somewhat likely to do so in 2010. In addition, 28 percent of employers currently offer managed accounts, which allow workers to delegate the overall management of their accounts to an outside professional. One-quarter of companies (25 percent) indicate they are very or somewhat likely to offer managed accounts in the coming year.

“In the last 18 months, employees’ 401(k) accounts took a serious financial hit due to the severe market downturn. Some of them also lost the additional retirement savings that their 401(k) employer match provided,” explains Pamela Hess, Hewitt’s director of retirement research. “While there has been marked growth in 401(k) balances since the market recovery began, we still see too many workers not saving and investing in a way that will help them achieve their retirement goals. Employers are trying to do their part to help—which is why they are restoring their matching contributions and offering features and tools that push workers to save more throughout their working years.”

Other Key Findings

- Fifty-nine percent of employers offer automatic enrollment, up from 51 percent in 2009. Among those that do not currently offer the feature, more than one-quarter (27 percent) are very or somewhat likely to add it in the coming year.

- Employers are taking considerable action to mitigate risk in their 401(k) plans. Nearly seven in ten (68 percent) are very or somewhat likely to increase the amount of employee communication surrounding the investment fees and overall fund fees in their 401(k) plans in the coming year. In addition, six in ten (60 percent) are very or somewhat likely to review their plan’s governance structure, and two-thirds (51 percent) are very or somewhat likely to benchmark plan administration and procedures to best practices in 2010.

- Companies are taking a similar risk management approach for their defined benefit pension plans. Of the survey respondents that offer pension plans, 80 percent are very or somewhat likely to review funding strategy and 73 percent are very or somewhat likely to assess how their current strategies are approaching pension plan risks. Almost two-thirds (64 percent) plan to adjust equity exposure and/or overall asset allocation while slightly more than half (52 percent) are very or somewhat likely to adjust their plan investments to align with their plan’s liabilities.

- The number of employers offering target date funds in 2010 (78 percent) remained consistent with 2009 (77 percent).

- Nearly one-third (29 percent) of companies currently offer a Roth 401(k) to their employees, consistent with 2009. Twenty-five percent said they are very or somewhat likely to add one in 2010. Among the employers that are unlikely to add a Roth 401(k) account to their plan, 54 percent said that it must be clear employees would use the feature before they added it.

- Fourteen percent of employers currently offer annuities outside their plan as a rollover option, up from 8 percent in 2009. More than one-quarter (28 percent) are very or somewhat likely to add them in 2010.