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