The Match is Back

… especially at small companies. 

As many companies have been struggling the last few years with the uncertain economy, small companies have been especially hard hit. They also seem to be slower to recover. The good news is that companies that made it through the last few years seem to be moving forward. 

In PSCA’s recently released 55th Annual Survey, data show that company contributions were up, pretty much across the board, both in the percentage making contributions as well as the average contribution. Large companies  (5,000+ participants) did not show a big jump in the percentage making matching contributions, but they were already at 95 percent of plans. The average contribution (as a percentage of pay) did increase for this group from 3.2 to 3.9 percent of pay. 

The most dramatic difference is with the companies that have 50-100 participants. For this group, the percentage of companies making matching contributions rose from 84.8 percent to 95.9 percent and the average company contribution rose from 3.5 percent to 4.4 percent of pay. 

Companies with fewer than 50 participants also showed improvement, albeit at a slower rate than the 50-199 group. 89.9 percent made the match in 2011, up from 82.4 percent the year before. The average company contribution for this size group dropped a bit from 5.0 percent of pay to 4.9. This is not a big change, except that every other size group increased. 

What I think this shows us is the slow progress of recovery in action. The impact of the challenges of the last few years was definitely size correlated. Big companies were the first to suspend and reduce contributions, whereas the small companies hung in a little longer. Big companies were the first to start bringing back the contributions and then increase them. Small companies are now bringing back the match – and quickly. 

Will we see an increase in average contributions with the little guys next? All things being equal, and if the trends hold, very possibly. Is this indicating anything on a larger scale about our economy? Maybe. Though lots of companies, and people, are still struggling, we’re seeing improvement in companies making contributions, indicating that they are more viable then they were a few years ago, and that is good news all around.