Companies reinstate 401(k) (matching) contributions

[Common Sense Party]

Most employers that cut back on matching 401(k) contributions during the recession are now reinstating the match.

Of 260 companies that discontinued or reduced their 401(k) matching contributions in the downturn, 75 percent have now restored them, says consultant Towers Watson. Most companies, 74 percent, reinstated at the previous level, while 23 percent restored at a lower level and 3 percent actually boosted their match.

A company match is key in getting employees to participate in retirement plans because it is a no-cost way to add to a worker’s nest egg, Towers Watson says. The most common employer 401(k) match is 50 cents for every $1 contributed, up to 6 percent of worker’s pay, Towers Watson says. A $1-for-$1 match up to 3 percent also is common.

Yet nearly 30 percent of plan participants are not contributing enough to get the full company match, says Aon Hewitt. Employees who don’t contribute enough to receive the full company match are “leaving free money on the table,” says Gerri Walsh, vice president of investor education at the Financial Industry Regulatory Authority.

more: http://www.greenbaypressgazette.com/article/20111205/GPG03/111205008/Companies-reinstate-401-k-contributions?odyssey=nav%7Chead

[Common Sense Party]

1. I've seen many employers restoring some or all of their match this past year.

Not all, unfortunately.

But that's one sign the economy is improving a little bit.

Unfortunately, as the article goes on to state, many employees aren't getting the full match because they're not contributing enough. That just shows how hard-hit many families' finances have been.

[dkf]

2. Just talked a co-worker into getting the company match at a minimum.

When I first started my job my manager told me I should and it is the best piece of advice anyone has ever given me. I started at a low wage, and never missed the amount I contributed because it was never there to spend.

I count the match as part of my wages that I am entitled to so to not receive it is throwing money away.

[Common Sense Party]

3. That's a wise attitude. Someone that doesn't take the match is leaving free money

sitting on the table.

Now, I understand that sometimes contributing 5% or 6% might just be too difficult when every penny counts.

But if they can at least put in a percent or two, they'll be getting a return they can't get anywhere else.