Slowly but Surely, Salary Freezes End, Benefits Return as Economy Improves

It seems the trend of extreme cost-cutting measures undertaken by most employers during the recession is beginning to reverse. A report from the Transamerica Center for Retirement Studies indicates that the past year has been beneficial for employers who said they did not need to make the severe cuts that marked the past several years. The study, Weathering the Economic Store: Retirement Plans in the United States, 2007-2012 , found that all retirement benefits, except for defined benefit plans and traditional plans, were mostly intact despite the troubled economy of the past half decade. The two exceptions declined 3 points to 16 percent between 2007 and 2012.

More than eight out of 10 employers said retirement plans were important for attracting and retaining employees. Retirement plans offered by employers increased from 72 percent to 82 percent between 2007 and 2012, largely on the backs of small businesses offering more options and the closure of failed businesses not offering plans. Over the five year period, the number of large companies offering automatic features rose from 31 percent to 45 percent and 84 percent of these companies adopted Qualified Default Investment Alternatives. Companies newly offering the Roth feature rose from 19 percent to 32 percent during the same period.

Participation rates in employer-sponsored retirement plans were stable for the five-year period, resting at 77 percent for the duration. Annual salary deferral rates have returned to the 2007 level of 7 percent.