The number of employers offering, and planning to offer, retirement perks to new employees has fell in response to the recession, according to a recent survey by Hewitt Associates.
Instead of offering premium retirement features, including automatic enrollment and company matches, the survey found that employers are more focused on offering lower-cost strategies, such as automatic rebalancing and target-date funds.
Hewitt’s annual survey of about 150 mid- to large-sized employers revealed that half (51%) currently offer automatic enrollment, up from 44% in 2008.
Among the companies that don’t currently offer automatic enrollment, just 25% are likely to add it for new hires, down from 57% in 2008.
The top reason for not offering automatic enrollment is because of the high cost of the employer match. According to the survey, only 2% of employers have cut or temporarily suspended 401(k) company matches since the recession began, about 5% plan to do the same this year.
Depending on where our economy stands in the next 12 to 18 months, Hewitt predicts that about 10% of companies will also cut or suspend 401(k) matches.
Has the economy forced your business to cut back on employee retirement perks? What lower-cost strategies are you using instead?