"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. "401(k) plans serve a wide range of employers and a wide range of employees. Additional reform should encourage and build on this commitment and avoid creating new obstacles to plan sponsorship."
Nevertheless, the impact of the shrinking economy and the reality of financial stress felt by Americans can be seen in some employee behavior. Nearly half (49 percent) of companies surveyed report that employees are increasingly taking loans from their retirement accounts. "The real importance of these findings is that the 401(k) plan system is an integral part of our retirement system in this country," said Lynn Dudley, senior vice president, policy, for the American Benefits Council. "Our study shows it remains both strong and popular."
Other Key Findings
- In 2008, 94 percent of companies provided some type of employer match to the employee’s individual 401(k) contribution, compared to 93 percent when the survey was first conducted in 2002.
- The most common employer matching contribution is three to four percent of a participant's pay; the most common employee contribution is five to seven percent per paycheck.
- Forty-four percent of participating organizations offer automatic enrollment in 401(k) plans; 56 percent do not. President Obama's FY 2010 budget included proposals for mandatory automatic payroll-deduction into workplace plans or individual retirement accounts.
