(Source: Business Wire)
Even with large losses in retirement account balances, 19.2 percent of participants in plans with services provided by the Principal Financial Group® actually increased contributions to 401(k) plan accounts in 2008, which is more than the combined total of those who stopped contributing or decreased their contribution (16.5 percent).
Other key findings in The Total View 2009, a newly released report on retirement savings trends from The Principal®, include:
Staying the course: despite the volatile environment, retirement plan participants and plan sponsors largely stayed the course in 2008, showing remarkable restraint and focusing on their long-term goals
Getting personal: where personalized, one-on-one guidance at the worksite was offered, participation and savings rates were even greater (with participation at 75.5 percent compared to 66.1 percent and salary deferral rates at 7.3 percent compared to 6.9 percent)
Back to basics: plan sponsors are seeking retirement plan services that go back to the basics and bring highly valued services at a reasonable price
The Total View 2009 is based on calendar-year 2007 and 2008 data from plans1 with services provided by The Principal and third-party research. A new analysis section provides additional insight into retirement trends and what they may mean for retirement plan participants, plan sponsors and the retirement industry.
"The Total View 2009 is particularly valuable because it reflects retirement savings trends during unprecedented market conditions," said Barrie Christman, vice president of individual investor services at The Principal. "While it was impressive to see that plan sponsors and participants held firm in 2008, we see them reacting more to the challenging realities of the ongoing recession this year."
The report includes early 2009 data that indicates participants and plan sponsors are making changes. As of June 1, 2009, 4.9 percent of employers have made a change to their matching contribution formula since the beginning of 2009. This is compared to 4.7 percent for all of 2008.2
"We believe this is a direct reflection of the economy taking a downturn and plan sponsors not having the funds to put into the plan," said Christman. "It's important to note that making a change doesn't necessarily mean a reduction. Many plans are moving from a stated match to a discretionary match, while others are adding maximums to the amount they will match.
