Eighty percent of companies that suspended or reduced their company matches in 2009 say they are planning to restore it this year, according to Hewitt Associates, a human resources consulting and outsourcing services company.
An analysis by Hewitt last spring found that companies could, on average, save more than $1,500 per employee each year by suspending the 401(k) match ….
Even AARP, which used to be called the American Association of Retired Persons and is a huge advocate of retirement savings, announced last March that it was suspending contributions to its employees' 401(k) plans. Although it achieved a savings of about $7.2 million, the organization reinstated its match last month.
Could the on-again, off-again nature of employer matches lead employees to be more casual with their own contributions? Or will employees recognize that the only reliable source of retirement wealth is themselves?
Some employers, Singletary notes, will make amends by adding new bells and whistles to their plans, such as automatic portfolio rebalancing.
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1 comment:
Is there evidence that automatic portfolio rebalancing is a good idea? In the examples I've seen, based upon actual market experience, the supposed gains from rebalancing are smaller than the transaction costs for doing the rebalancing.
Rebalancing is supposed to mean that you are buying low and selling high, and who could be against that? What it actually means is that you are selling your winners to buy more of your losers, without pausing to ask whether the losers are on the verge of a comeback, or the winners are at the end of their streak.
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