In another sign of the toll the recession is taking on Americans' retirement dreams, a new study says 34% of U.S. employers have either reduced or eliminated matching contributions to 401(k) and 403(b) plans.
Those reductions have taken place since January 2008, according to the study by Spectrem Group. Twenty-nine percent of employers say they plan to reduce or eliminate matching contributions over the next year.
The new data points to an American workforce that is suffering a triple whammy in its attempt to secure a comfortable retirement. In addition to enduring cuts in matching contributions, workers have also suffered deep market losses and cut back on deferrals.
A second study by Spectrem showed that 20% of employees enrolled in employee-sponsored defined contribution plans have reduced their deferral rates, and another 5% plan to do so over the next year.
This, combined with a decline in deferral rates, raises questions about the ability of the current generation of working Americans to adequately fund their retirements," said George H. Walper, Jr., president of Spectrem Group.