Nearly one-quarter, or 23%, of employers have eliminated 401(k) matches, according to a study by CFO Research Services for Charles Schwab. And 35% don’t expect to reverse the elimination, according to a separate survey by Watson Wyatt.
On top of this, one-quarter are also cutting back on enrollment eligibility, according to the Schwab survey.
Employees are taking the cutbacks hard. Eighty-seven percent said the most important feature of their company’s 401(k) was the match.
In addition, the Watson Wyatt survey found that among employers that have cut or frozen employees’ salaries, 55% expect to restore the cuts in the next year, but 20% think they will be permanent. As Laurie Bienstock, national director of Watson Wyatt’s strategic rewards practice, put it, “We’re not going to go back to the status quo.”
