Defense and aerospace company GenCorp Inc. said it was reinstating its 401(k) plan matching contribution, the latest in a growing number of employers that have done so or will be doing the same.
In a Securities and Exchange Commission filing Tuesday, March 30, Rancho Cordova, California-based GenCorp said it would restore its 401(k) plan match for nonunion employees at the same rate prior to its January 15, 2009, suspension. The match will be restored in July.
Prior to the suspension, GenCorp matched 100 percent of employees’ salary deferrals up to the first 3 percent of pay and 50 percent of deferrals on the next 3 percent of pay.
However, GenCorp now will make matching contributions in cash. Previously, it matched contributions with company stock, which a GenCorp spokeswoman previously said was diluting the stock’s value.
Meanwhile, a survey released Wednesday by Boston-based mutual fund provider and 401(k) plan administrator Fidelity Investments found that 44 percent of employers that suspended their matching contributions last year either have reinstated or intend to reinstate the match during the next 12 months.
“As the economy begins to improve, employers large and small are bringing back their 401(k) matching programs,” James M. MacDonald, president of Fidelity unit Workplace Investing, said in a statement.
The likelihood of employers reinstating matching contributions, though, varies significantly by company size. For example, among employers with at least 5,000 employees, 70 percent either have restored or intend to restore the match within the next 12 months, nearly double the 36 percent of employers with 500 or fewer employees that either have restored matching contributions or plan to do so.
The results are based on a survey this month of 293 Fidelity clients that suspended or reduced their 401(k) matching contributions last year.