SmallBusinessNewz

A Deloitte study finds that employers are concerned with employees' retirement preparation habits. Employees are taking a "wait and see" approach with their 401(k) plans as they wait for the economy to get better.

"While today's economic conditions have dramatically changed the retirement savings landscape, 401(k) plans are bent, not broken," said Mark Dzierzak, specialist leader with Deloitte and director of the survey. "Plan sponsors surveyed continue to support their plans and will maintain a close watch on their role as a strategic tool in their overall benefits program."

"The economic crisis has no doubt taken its toll on 401(k) offerings and participants," said 2009 ISCEBS President C. Scott Boring of Lockton Insurance Brokers, LLC. "But the important thing now is for employees to obtain a clear understanding of the direct impact this has on their plans by taking advantage of the educational tools and resources offered."

Findings of the survey include:

- 63 percent of employers surveyed say employees are taking the "wait and see" approach

- 17 percent indicated they have seen increased volumes of deferral rate changes, hardship withdrawals, loans and other similar activities.

- Nearly two-thirds (63 percent) of surveyed employers indicated they must take an interest in their employees' readiness for a comfortable retirement, and 14 percent state they feel "very" responsible for preparing employees.

- Almost one-fifth (19 percent) of surveyed plan sponsors believe "very few" of their employees will be financially prepared for retirement.

- 38 percent reported their employees decreased deferral rates in 2009, while the majority (60 percent) held steady at their current level of contribution. Twelve percent of employers surveyed also indicated an upswing in opt-outs from automatic enrollment programs.

"Because 401(k) plans represent a primary savings vehicle for employers and a key component of the Total Rewards package for employees, our survey indicates that the ongoing affects of the economic downturn have created a source of anxiety for both employers and employees alike," explained Tim Phoenix, principal with Deloitte. "With a greater use of 401(k) plan educational tools, the introduction of ease-of-use features and improved organizational communication, we believe employers will be better positioned to help employees meet their personal retirement goals."

Plan sponsors are taking action to boost participation through a variety of means. The entire report can be viewed here.