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Employers increase 401(k) contributions as they cut pensions

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in Employee Benefits Program,Human Resources

Two-thirds of organizations with traditional defined-benefit pension plans have closed them to new employees, frozen them for all participants or plan to do so within two years.

A new survey by the Employee Benefit Research Institute also found that most employers increased their contributions to employees’ defined-contribution 401(k) plans once they froze the traditional plans. They also are adopting automatic enrollment of their workers in 401(k) plans, which could increase retirement savings.

Result: Employees perceive both a negative and a positive change in their retirement savings situation, rather than simply a negative one.

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