Holding steady?
June 10, 2009 by Bill MeltzerPosted in: Uncategorized
What are your employees thinking about doing with their 401(k) accounts in these difficult economic times?
A recent New York Daily News reader poll suggests that most current participants in a 401(k) plan intend to stay the course. Nearly half (49%) said they’d leave their investments alone and try to ride out the storm.
Surprisingly, 21% said they intended to increase their investments in the hopes of getting in on some bargains that will grow dramatically as the economy stabilizes. Another 10% intend to downshift a portion of their investments to more conservative options (such as bonds).
There is still a significant percentage (19%) that intends to get out entirely. It also should be noted that there’s only so much one can read into polls such as these. Responses are limited to people who not only participate in a plan but also take an active interest in them.
Nevertheless, there is at least hope that the dire predictions of massive long-term drops in 401(k) participation will prove to be unfounded.
Tags: 401(k), 403(b), defined-contribution plans, retirement benefits
June 12th, 2009 at 2:16 pm
With our 401K – I have not had any one enroll in the last open enrollment or forsee any one enrolling in the July one – I have had three individuals stop payroll deduction into it, which honestly it includes my self, the spouse lost his job going on 8 months, and needed the extra to pay bills so if this is any indication. Hopefully and I am saying that with a little doubt I will start it again once things get a little better.
June 17th, 2009 at 8:08 am
I have heard a lot of similar anecdotal stories that a large number of employees are leaving what they already have in their accounts, but have decreased or stopped current contributions and are re-directing that money. They are using this “extra” money to pay down bills or build up savings accounts in case they or their spouse get laid off. Possibly this option was included in the survey but I can’t tell by the story above.
June 18th, 2009 at 1:51 pm
We are closing our 401k plan due to cost to the company and lack of participation. Alot of employees had to do hardship distributions and loans. The hardship distribution people were forced to stop contributing for six months also. Personally, I stopped contributing last year and will be rolling mine over into an IRA. We are doing the pay down bills – get out of debt scenario.
June 18th, 2009 at 2:23 pm
We have experienced a significant decline in employees contributing to their plans, a fair number who have taken loans, and a few who have closed out their accounts altogether to take their money in cash (despite the tax consequences). A couple have rolled their accounts into IRA’s, as well. None have signed up for the plan in 2009 and none have increased their contribution.
June 18th, 2009 at 3:03 pm
We had several new enrollments for January and I already have a handful for July. We also have quite a few who wish to increase their deferral for July 1st. We have had many loans taken in the past year but no hardship withdrawals. We do have a financial advisor come in throughout the year – I think that helped.
June 22nd, 2009 at 9:55 am
Most of our employees contribute only what the comany will match up to and they keep all their money in the lowest risk fund (money market). They don’t trust mutual funds anymore…