As witnessed in previous downturns in the economy, businesses suspended their matches in order to control their costs. With the most recent recession, as the economy continued to improve there was some uncertainty that employers would re-instate their matching contributions; however, studies have shown that a good percentage of 401(k) matches have been brought back.
Employers today understand the evermore importance of 401(k) plans and they are designing their plans with a level of responsibility in mind to help participants better prepare for their retirement. Employers are now taking a vested interest in their employees’ financial future as one’s retirement will be more dependent on personal savings rather than pension plans and the uncertainty of social security. 401(k)s continue to be the main vehicle for most people to save for retirement. To encourage participants to save more a new trend has begun.
Some of the new creative trends employers are offering include:
-Matching a higher participant contribution rate at 25% rather than a lower contribution rate at 50%
-Providing more frequent education for retirement planning
For more information click here.