The employer retirement match appears to be on the rebound

Nov. 2, 2011 at 12:42 PM ET

Your future retirement plans may be getting a bit brighter, despite the topsy-turvy stock market.

A new analysis from consulting firm Towers Watson finds that three-fourths of companies that had stopped providing matching 401(k) contributions during the height of the recession have since reinstated them.

A matching contribution generally means that if an employee puts some of their salary away in a retirement account, then the employer will match a certain percentage of that employee’s contribution.

For employees, it’s a good deal because it essentially amounts to free additional money in your retirement fund. But during the recession and aftermath, Towers Watson said about 13 percent of employers appeared to look at it as an extra perk that they could cut to save money.

Towers Watson originally looked at employer matches for retirement accounts back in 2009, as part of a larger study on how companies were responding to the recession. They found that 231 companies had stopped matching retirement funds, and 29 had reduced that benefit.  

The vast majority of the companies who canceled matching retirement plan contributions did so in the first half of 2009.

Then, as economic conditions began to improve, companies started bringing the benefit back.

Towers Watson was able to get information for 205 of the 231 companies that told them back in 2009 that that they had stopped making contributions. Three-fourths of those companies said they’d brought the benefit back.

Towers Watson found that most companies reinstated the match at the same rate they’d offered previously. But about 2 in 10 reduced the amount, and a handful actually improved the matching benefit.

Of the 29 companies who said they’d reduced their matching benefit, Towers Watson said about one-third had returned to pre-recession matching levels.

The sample Towers Watson used came from a wide variety of industries, including manufacturing, health care, automotive and technology.

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