In Need of Cash, More Companies Cut 401(k) Match

[underpants]

Source: NY Times

Companies eager to conserve cash are trimming their contributions to their workers’ 401(k) retirement plans, putting a new strain on America’s tattered safety net at the very moment when many workers are watching their accounts plummet along with the stock market.

FedEx is not the only one. Eastman Kodak, Motorola, General Motors and Resorts International are among the companies that have cut matching contributions to their plans since September, when the credit markets froze and companies began looking urgently for cash. More companies are expected to suspend their matching contributions in 2009, according to Watson Wyatt, a benefits consulting firm.

Retirement policy specialists said they did not expect employees to react immediately to the loss of this incentive by stopping their own contributions. Study after study has shown that employees procrastinate when it comes to retirement-plan chores, and in this case the inertia may work, unwittingly, in their favor.

Many of the latest 401(k) cutbacks are turning up in industries with obvious financial problems, like the auto industry, health care and newspaper publishing. Industries that depend on free-spending consumers, like resorts and casinos, are also seeing cuts. Often when one company in an industry cuts its benefits others will follow, to keep their labor costs competitive. ;-)

Read more: http://www.nytimes.com/2008/12/21/your-money/401ks-and-similar-plans/21retire.html?pagewanted=1&_r=1&hp

[maseman]

1. If the match is gone then one should try to invest more

I know that sounds nuts but this is a dog eat dog world. It is up to save for our retirements if we are able.

[davidinalameda]

10. I can barely pay my bills

I'm not thinking about retirement

[Wapsie B]

2. If they're that eager to pare down costs why not take a few jobs

near the top of their corporate pyramids? Seriously. Not middle-managers, but upper management.

[BeatleBoot]

3. Pre - 2001 if you live in Michigan

Old news...

[chucktaylor]

4. I guess you have to weigh what it is worth putting money in a 401k against

what it is worth to put it in a hole in your backyard.

As for the company cutting off matching deposits, I have seen benefits cut before. In my own job. I care more about what my entire portfolio is today. Even with the money matching, would I have been better server by burying it in my backyard. THAT would tick me off.

[CoffeeCat]

5. Watch it all get stripped away...

Moves like this should shock no one.

If anyone is shocked by some companies stopping 401k matches, they shouldn't be.

Companies will try to save money in 2009, because the economy is going to further plummet. I won't be shocked
by anything I see.

I won't be complaining either. If our household has income from a job, I will consider ourselves fortunate.

Last year, at about this time, my husband rec'd a bonus of several thousand dollars. This year, we got a
fleece blanket. Everyone in the company did...even the CFO. We love that fleece blanket and we thank our
lucky stars for it--because it means we're still employed. It's also inspired a lot of jokes about my
husband official being Clark Griswold...and aren't we lucky that his bonus was a fleece blanket and not a
"Jelly of the Month Club" membership :)

[OHdem10]

6. Competitive is code for cheap labor. Just watch as you read

and hear stories re the economy and business.

in other industrial Countries of the world, Pensions, Health Care,
Other Compensations are shouldered by the governments.

This why our Labor is so expensive and they must go abroad for labor.
(sarcasm)

[Trajan]

7. NOT just a race to the bottom ....

But a race to 1890 ...

I suspect I am going to wake up one day to find children covered in coal dust, walking home after a 18 hour workday at the mines ....

[BadGimp]

8. our's did this week in fact

eliminated them all

and more

[Faygo Kid]

9. Thank you, George W. Bush.

You achieved your goal of destroying the middle class.

Somehow, you didn't get to destroy Social Security, which was a major goal for you. Otherwise, you were a smashing success: Immoral war, enriched the already rich, destroyed the rest of us.

Now go away.