- Nearly nine out of 10 employees with a 401(k) retirement savings plan received an employer match in the past year
- Just 11 percent of employers suspended their 401(k) match due to the COVID-19 pandemic, and about half of them intend to restore the match as soon as economic conditions allow it
- Employee contributions to retirement plans have been largely unaffected by the pandemic
Employers whose revenues have plummeted during the COVID-19 pandemic have often searched for ways to cut expenses, including the difficult choice to lay off or furlough staff, roll back hours, or reduce wages. Yet the vast majority of employers who offer a match to employees’ retirement plans have left this benefit untouched.
According to Fidelity Investments, which manages more than 30 million retirement accounts, 88 percent of employees with a 401(k) received a company match over the past year. The average employer match over the past year was $4,030.
In the second quarter of the year, which saw the most pronounced economic effects of the pandemic, just 11 percent of employers said they had suspended 401(k) matches. Forty-eight percent said they intend to restore the match as soon as economic conditions improve, while 32 percent indicated they will do so next year and 6 percent said there are no plans to restore the match.
Few employers adjusted their retirement savings in response to the pandemic, with less than 1 percent stopping their retirement contributions in the second quarter and 9 percent increasing their contributions. Just 3 percent of eligible employees took advantage of a provision in the CARES Act allowing them to withdraw funds from their retirement savings to cover financial needs brought on by the economic downturn.