Fidelity: Workers putting more into 401(k)s again

BOSTON -- Workers are again embracing 401(k) plans after the market meltdown and ongoing recession left many unable or unwilling to set aside some of their paychecks for retirement, according to the nation's largest workplace savings plan provider.

In the second quarter, more participants in Fidelity Investments' defined contribution plans raised the amount they set aside rather than decreased the percentage of pay they put into their savings. In a study released Wednesday, the Boston-based company said it's the first time that's happened in a year.

In each of the previous three quarters, the percentage of Fidelity's 11.2 million plan participants cutting their contributions topped 6%, exceeding the number who increased the amount going into their 401(k)s. But in the three months ended June 30, 4.7% boosted their contributions, with just 3% decreasing it. The vast majority left their rates untouched in all those periods.

Investors who managed to sock away more have been rewarded, with the Standard & Poor's stock index rising more than 15% in the second quarter. Those who responded to last year's market plunge by moving money into more conservative money-market funds and Treasury bonds missed out on the rally.

"Workers with a long-term view who stayed the course have been rewarded with a very nice bounce," said Scott David, president of workplace saving at Fidelity, which manages more than $1.3 trillion, including money in its mutual funds.

The average individual account balance rose 13.5% in the second quarter to $53,900, mainly due to rising stock prices but also from plan contributions by workers and their employers.

The recession and market decline that accelerated sharply last fall have left many companies hard-pressed to maintain the 401(k) matches they provide workers to encourage retirement savings. But more than 90% of the 17,500 plans that Fidelity administers for companies have left the percentage they match unchanged since September, rather than reducing it or suspending matches altogether.