Pensions Eschewed, but 401(k)s Embraced

Counting Pennies: More employers view 401(k) plans as an important ingredient in strengthening their competitive posture amid a tight labor market. Charles Schwab Corp. says 64 percent believe 401(k) plans are necessary to recruit and retain top employees, and 67 percent also believe that offering a 401(k) benefit enhances their corporate reputation. More than 200 senior finance executives from a diverse range of large U.S. companies were questioned about their perceptions of the value of 401(k) plans. Sixty percent of employers say they are committing more resources to help employees with retirement planning than they were five years ago. Although enrollment in plans is considered to be a shared responsibility of companies and their employees, executives say it is incumbent on their firms to educate people about benefit plans, features, restrictions and costs. Aside from helping people live comfortably in retirement, senior executives also cite a commitment to helping employees plan for their children’s college education, pay off debt, or buy a home, among other things. Nearly nine in 10 say it is important to provide employees with investment advice when sorting out these decisions.