Tom Murphy
RedwoodAge.com

Most boomers shifted their retirement plans into neutral when the recession struck, and who can blame them?

The nation's 78 million boomers took a huge hit to their retirement savings, with many workers in their 50s and early  60s losing up to half of the nest egg they'd so carefully nurtured over three decades of hard labor.

Eighty-seven percent of employers say their workers are delaying retirement due to the economic downturn, according to a survey by Aon Consulting, which sells $1.36 billion a year in retirement services. Companies are also maintaining the status quo, with nine out of 10 saying they aren't planning any major changes in their retirement programs.

In a survey of 1,313 companies, a third said only seven out of 10 workers are even enrolled in defined contribution plans like 401(k)s. Most of the companies believe the workers simply can't afford the payroll deductions. That confirms a recent government report that found many people are dipping into retirement savings to make ends meet.

Amol Mhatre, who spearheads innovations for Aon's retirement plans, said the "wait-and-see" attitude among workers and companies isn't surprising giving the "dramatic economic swings" of the past year or two. 

"Retirement security for working Americans will soon become a challenge for policy makers and employers, along the lines of health care reform," Mhatre said. "With a trend toward individual responsibility, increased mobility, complex investment choices, rising cost of health care and improved life expectancy, employers may have to do more to help workers understand and plan for their retirement needs."

For example, the survey found 38 percent of employers thought their workers had little knowledge of how much it costs to retire; another 52 percent think workers have only "some idea" of the need. Only 8 percent thought their employees had a strong understanding of retirement needs.

It's not the workers are ignoring the issue. Almost two-thirds of the companies said their employees were asking more investment-related questions in 2008 than a year earlier. But only a third of the companies raised their effort to inform the workers.

The high cost of company contributions, market volatility and administrative costs were among the reasons that 92 percent of the employers were keeping plans as they are. Only 45 percent offered a defined benefit plan like a pension to workers, and 41 percent have frozen pension plans for new employees. A quarter froze their plans entirely but have no plan to terminate the plan.

"We do not subscribe to the 'wait-and-see' attitude for employers with frozen pension plans," said Kemp Ross, the head of Aon Investment Consulting. "Employers have no real upside for taking on the financial risks and costs of frozen pension plans, so organizations need to establish an exit strategy for such plans, which can be executed with a balanced approach to funding and investments during the next few years, as financial markets recover."

More than half of the employers, 56 percent, offer matching 401(k) contributions. Two out of five have automatic enrollment plans, in which all workers are included unless they opt out.

"While most of our survey respondents did not cite changes to matching contributions, some financially constrained companies did suspend or modify their 401k match in response to the economic downturn," said Mhatre.