PSCA said it found that more plan sponsors suspended or reduced non-matching company contributions than matching contributions and more large companies (companies with more than 5,000 participants) than small companies suspended contributions. Of companies that suspended matching contributions, almost half (46.7%) have restored the match or plan to restore it within the first quarter of 2010, with more large companies (52.7%) doing so, according to a press release.
Among survey respondents, 4.7% of companies increased
their matching contributions during the downturn.
The survey also revealed a clear correlation between
availability of matching company contributions and participation rates, as 72.9%
of companies that suspended their match experienced a decrease in plan
participation versus only 14.4% of those companies that maintained matching
contributions. However, more companies that did not change their match experienced
an increase in plan participation (17.9%).
PSCA said that its recent survey of defined contribution
plan sponsors found that overwhelmingly, sponsors stepped up to help their
participants during the 2008-2009 economic downturn. More than half of respondents
(54.3%) indicated they increased their employee education efforts.
In addition, sponsors evaluated the specific needs of
their employees and customized their support to meet those needs. PSCA found
that plan sponsors took a variety of steps tailored toward their employee
populations including evaluating adding loans, allowing in-service
distributions, allowing hardship withdrawals, changing the vesting schedule,
decreasing the waiting period for plan eligibility, and adding automatic