Why Did Some Employers Suspend Their 401(k) Match?

Alicia H. Munnell Laura Quinby

IB#10-2

The brief’s key findings are:

  • During 2008-09, over 200 employers suspended their 401(k) matches, affecting 5 percent of active 401(k) participants.
  • Liquidity constraints rather than profitability concerns appear to be the reason.
  • Some large employers that suspended their match have since reinstated it.
  • If the others follow suit, the temporary suspensions may cause little harm for employees – particularly given the alternatives of salary cuts or layoffs.