Bosses, workers starve DC plans

Thirty-four percent of U.S. employers have reduced or eliminated matching contributions in their defined contribution plans in 2008, and 29% of employers plan to do so in the next 12 months, according to a study released today. Meanwhile, 20% of employees have reduced their deferral rates to their retirement plan over the last year, and in the next 12 months, 5% of employees intend to reduce how much they contribute to their defined contribution plan. Spectrem Group released two reports, “Plan Sponsor Attitudes at the End of a Tumultuous Year” and “Participants’ Attitudes at the End of a Tumultuous Year.” Both reports showed employers and employees alike are reducing their contributions to 401(k) and 403(b) plans due to the weakened economy. This increases concern about the ability of Americans to fund their retirements adequately, George H. Walper Jr., president of Spectrem Group of Chicago, said in a statement. The report “Plan Sponsor Attitudes at the End of a Tumultuous Year” is based on the online polling of more than 150 plan sponsors nationwide in February and has a margin of error of plus or minus 8%. “Participants' Attitudes at the End of a Tumultuous Year” is based on the online polling of 400 active retirement plan participants nationwide in February and has a margin of error of plus or minus 4.9%.