As the recession drags on, more employers are reducing or eliminating their matching 401(k) contributions. A new report from Mercer, “Suspending the 401(k) match – Look before you leap,” cautions employers to have a full understanding of the implications and potential pitfalls of taking this step.
“Distressed organizations may feel they lack sufficient time or resources to carefully consider the impact of contribution reductions or to evaluate alternative approaches. But the effort invested up front could save considerable time and expense later in dealing with unintended consequences,” says Bill McClain, Mercer retirement consultant.
