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Employers belatedly restoring 401(k) matches

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From the better-late-than-never category, here’s a little good news for 401(k) investors.

An increasing number of companies that reduced or eliminated 401(k) matching contributions during the financial crisis say they plan to reinstate them this year.

The latest evidence of that trend came Monday in a survey of 162 mid-sized and large employers by benefits administrator Hewitt Associates.

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Four of five companies that chopped 401(k) matches say they’ll restore them this year, according to Hewitt.

That’s obviously a welcome development for employees in those companies.

But it can’t make up for their lost contributions over the past year or two – and especially for the investment returns those matching contributions would have generated had they been invested anywhere near the bottom of the market last year.

Imagine how much better employee 401(k) accounts would be doing if the contributions had kept flowing as the Dow Jones industrial average surged more than 60% last year from its bottom in early March.

-- Walter Hamilton

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