More companies cut or end 401(k) plan matches

— -- The battle for a secure retirement is about to get even tougher. Several new surveys of company executives show that they plan to reduce or suspend their company's retirement-plan contributions this year.

Dozens of employers in the past year have already slashed such costs.

The trend means one important thing for workers: smaller nest eggs, unless they save enough to make up for the missing company contributions and matches.

Arrangements vary, but employers have often matched 25 or 50 cents of every dollar an employee puts in a retirement account, up to 6% of pay.

Companies of all sizes, under financial pressure, are "retrenching on the 401(k) front," says Alicia Munnell, director of the Center for Retirement Research at Boston College.

A survey released Wednesday by research and consulting company Spectrem Group says 29% of employers intend to reduce or eliminate contributions to "defined-contribution retirement plans" in the next 12 months.

While the survey has a large +/- 8 percentage point margin of error, other surveys back up the dire forecast.

A mid-February study by employment consulting company Watson Wyatt Worldwide found that 12% of 245 large companies have already cut their 401(k)/403(b) matches — and another 12% plan to do so in the next 12 months.

Most workers are unprepared to fund retirement.

Using data from the Federal Reserve's 2007 Survey of Consumer Finances, which was published before the financial crisis, Munnell pegged the median 401(k) balance for those approaching retirement at $60,000.

Given the stock market turmoil, those retirement funds are likely only worth about $40,000 now, she says.

Most employees seem braced for the news. Nearly half of workers said in November 2008 that they were concerned that the sour economy would cause their employers "to cut back on matches to 401(k)/ 403(b)/457 plans," according to MetLife's seventh annual Employee Benefits Trends Study, which was released on Monday.