Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

The 401(k) match is back!

By Chavon Sutton, staff reporter


New York (CNNMoney.com) -- Employees who took a hit on their savings last year might finally be in for some welcome news: Companies are stepping up efforts to help them save more for retirement.

Of companies that suspended or reduced 401(k) match programs, 80% planned to restore them this year, according to a survey conducted by Hewitt Associates, a global human resources consulting firm.

Workers were dealt a double-blow during the recession, as historic stock market declines decimated retirement portfolios while companies slashed 401(k) matches to reduce costs.

"We viewed [the 401(k) suspensions] as a temporary measure needed to provide cash flow to companies," said Alison Borland, retirement strategy leader for Hewitt's outsourcing business, who expected only 50% of companies to restore the match in 2010. "We are relieved that this is reversing this quickly."

Large employers reinstating company matches for 2010 include American Express and FedEx.

The survey also found that employers are losing confidence in their employees' ability to save for retirement.

Of the 162 mid-to large-sized companies surveyed, 54% of employers said they were less confident, compared to 66% in 2009. Less than 18% of employers said they were "very confident" in their workers' ability to save enough.

As a result, companies said they are offering more investment services and tools to help workers navigate the maze of savings options. And the number of firms offering automatic enrollment, in which employees opt out of plans instead of signing up, has increased from 51% a year ago to 59%.

Although unemployment hovers at 9.7%, some experts say the restoration of the company match is a signal of employer confidence and may be a precursor to hiring.

"When companies start to restore the match, it gives employees more confidence and signals what the employer perceives as underlying strength in the market place," said Brigitte Madrian, a public policy professor at Harvard University. "We should be happy about this news."  To top of page

Index Last Change % Change
Dow 17,740.63 79.92 0.45%
Nasdaq 4,736.16 19.07 0.40%
S&P 500 2,057.14 6.51 0.32%
Treasuries 1.78 0.03 1.83%
Data as of 7:19pm ET
Company Price Change % Change
Bank of America Corp... 14.11 0.06 0.43%
Chesapeake Energy Co... 4.59 -1.12 -19.61%
Endo International P... 16.17 -10.42 -39.19%
Freeport-McMoRan Inc... 11.79 0.50 4.43%
Apple Inc 92.72 -0.52 -0.56%
Data as of 4:04pm ET
Sponsors

Sections

Apple shares are on track to close at their lowest level since June 2014, a sign of the deep level of concern about the company's ability to resume iPhone sales growth and tackle challenges in China. More

Only 0.5% of the total U.S. workforce uses online platforms like Uber and Taskrabbit for work, according to famed Princeton economist Alan Krueger. More

Ali Abdullah tells CNNMoney's Laurie Segall how he went from being homeless to launching a startup that's raised $2 million. More

Visa says new software will allow consumers to check out with chip cards as fast as swiping a card with magnetic strip. More