Seeking to find cash wherever they can in this tough economic climate, 34 percent of companies have reduced or eliminated their matching funds to employee 401(k)s, and 29 percent plan to do so in the next 12 months, according to a survey by the Spectrem Group. The Spectrem Group surveyed a cross section of 150 U.S. companies to determine this trend. The survey has an margin of error of eight percentage points.

Employers are not the only ones saving cash by cutting back contributions. Spectrem found that 20 percent of employees have decreased the amount they are saving, with another five percent likely to do so in the next 12 months. The survey of employees sampled 400 retirement plan participants and has a margin of error of 4.9 percentage points.

The Pension Rights Center, which keeps a database of which employers are cutting, has found that at least 148 U.S. employers have stopped or reduced 401(k) matching contributions since June 2008. Major companies on this list include: AARP, Eastman Kodak Co. (EK), Hewlett-Packard Co. (HPQ), JPMorgan Chase (JPM), General Motors Corp. (GM), Motorola Inc.(MOT), Sears Holdings Corp. (SHLD), UPS (UPS), and Xerox Corp.(XRX).

"It's a double-whammy for workers," Nancy Hwa of the Pension Rights Center told Bloomberg. "They're stretched. They need money. Now their employers are pulling back on the match. It illustrates a fundamental weakness of the 401(k) system." Public employees are also facing cutbacks to their retirement plans, as states struggle to stay within budget.

More than $2 trillion dollars have been lost in retirement assets since October 2007. House and Education Labor Committee Chairman George Miller called the current 401(k) plans a "high stakes crap shoot."

In as survey on WalletPop, 57 percent of the people responding indicated that their company had reduced or eliminated retirement plan contributions. When asked, "How hard has your 401(k) or IRA been hit during the economic downturn?" Seventy-eight percent said, "a lot."

Prior to this change, about 48 percent of a company's benefit costs were spent on retirement, according to the Employee Benefit Research institute. In 2007, about $1.5 trillion dollars was spent on benefits and $693.9 billion of that was spent on retirement benefits. The other big chunk was $623.1 billion for health benefits. Of those retirement benefits, $307.5 billion was for Social Security payments. Private employers contributed $199.9 billion to retirement plans and public employers contributed $186.4 billion.

Lita Epstein has written more than 25 books including "Working After Retirement for Dummies."

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