Many Companies Reinstate Workers 401k Match

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Hundreds of companies across the country are giving their employees back a benefit they took away during the recent recession, just in time for Christmas.

The companies are again matching contributions to their employees' 401k accounts.

Seventy-five percent of the businesses that discontinued or reduced have reinstated their 401k matches at the previous level, according to reports.

Three percent of those companies even boosted their match.

"I think it's excellent news for the economy. The 401k match from a company perspective is an expense, but it's an investment in the future of their employees," said Ollen Douglass, chief financial officer of Motley Fool, a financial investment website.

In most retirement plans, for every $100 saved an employer will chip in $50, up to a certain point. It's literally free money.

**How much can you save?  Try the free 401k calculator.

But while businesses are doing their part by restoring the company match, workers also need to take advantage of it.

"Even with companies reinstating their 401k match, that's only half of the news. The other half of the news is how important it is for employees to be saving on their own," said Kathy Butler, editor in chief of Employee Benefit News.

Almost 30 percent of plan participants don't contribute enough to get their full company match.

Experts say one reason is that workers don't think they can afford to contribute their half.

Many of these employees are young and paying off student loans, credit card bills, and car loans.

Some companies are taking steps to solve this problem. They're offering programs that help workers gradually increase their 401k contribution until they reach the match point.

A new study found that reinstating 401k matches doesn't only benefit employees. Helping workers save for a timely retirement also helps businesses avoid an older, more expensive workforce.

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Charlene  Aaron

Charlene Aaron

CBN News Reporter

Charlene Aaron serves as a general assignment reporter and helps anchor for the CBN News Channel.  Follow her on Twitter @CharNews and "like" her at Facebook.com/CharleneIsraelCBNNews.