Study: As Economy Has Recovered, Pension Plans Haven’t
As businesses continue to recover from the Great Recession, the number of employers that offer retirement plans has nearly returned to pre-crisis levels, according to a new Transamerica survey
. However, many pension plans that disappeared during the downturn have not returned.
Over the course of two months in the summer of 2014, Transamerica surveyed 751 companies that employ 10 or more people. They found that while just 15% of companies had “fully recovered” from the recession’s impact, 94% of businesses reported at least some level of recovery.
In addition, 72% said they had expanded their staff over the previous year, compared with just 16% of companies that reported having downsized. By comparison, 48% of employers in the 2009 survey reported downsizing, including 61% of companies with 500 employees or more.
Likely buoyed by these positive economic indicators, employers are increasing the value they place on their company-sponsored retirement plans. Nearly 90% of all employers said 401(k) plans were important for attracting and retaining talent; just a year earlier, 80% of employers said they were important.
Generally, companies with 500 or more employees are more likely to offer robust benefits than their smaller counterparts. Nearly every large company (98%) offers a 401(k) plan, and 86% of large companies include an employer match, compared with the 76% of small employers who offer any kind of plan, with or without a match. Nearly one in five small employers offer no retirement benefits; only 1% of large employers can say the same.
However, some retirement plan staples of the mid-2000s economy still have not returned. While 40% of large employers reported offering a defined benefit plan before 2009, just 14% do so now. And of the large companies that do offer DB plans, 29% of them block new employees from joining the plans. In addition, while 86% of companies reported offering a match before the Great Recession, more than 1 in 9 companies decreased or suspended their match and have kept their contributions below pre-2009 levels.