A new survey has found that about one in four (26%) employers cut their contribution or eliminated their match altogether to their defined contribution plans in 2009.
The Retirement Plan Survey, conducted by Grant Thronton LLP, Drinker Biddle & Reath LLP and Plan Sponsor Associates also found that more than half (53%) of employers who cut or eliminated contributions haven’t yet decided whether to return to previous levels in 2010, while another third (33%) aren’t planning to reinstitute the benefits.
Meanwhile, 33% of plan sponsors surveyed reported that their plan participants had decreased their contributions, 56% saw an increase in loan requests, and 34% of plans had increased hardship withdrawals in 2009, according to the survey.
“The recent economic challenges have certainly affected the funding—including employer and employee dollars—of defined contribution plans,” said Debbie Smith, an Employee Benefits practice partner with Grant Thornton LLP. “While most are taking a wait-and-see approach in 2010 with respect to employer contributions, the fact that one fourth of employers have taken significant measures to adjust contribution plans is quite telling of the times.”