401(k) Fund Match Not Restored by Half of U.S. Firms

[marmar]

By Margaret Collins

June 30 (Bloomberg) -- Almost half of U.S. companies that reduced or suspended their contributions to employee retirement plans during the recession haven’t restored them, according to Towers Watson & Co.

A survey of 334 firms with more than 1,000 employees in April and May found that 18 percent reduced or suspended their contributions to 401(k) plans since September 2008 to save cash. About 49 percent of them haven’t resumed their matches, the New York-based benefits consultant said today.

“Some of the companies who have reinstated or who are thinking about reinstating are making the contributions contingent on profits of the company,” said Robyn Credico, defined-contribution practice leader in North America for Towers Watson. “If there is ever another downturn they don’t have to go through the painful experience of communicating to employees that they’re suspending the match.”

Companies including General Motors Co., Ford Motor Co., Eastman Kodak Co. and FedEx Corp. have restored contributions to 401(k) plans, according to the Pension Rights Center, a consumer group based in Washington. Motorola Inc., with 53,000 employees globally, will reinstate its contributions to employee plans starting July 1, said Tama McWhinney, a spokeswoman for the mobile-phone maker. Sears Holdings Corp. with 290,000 U.S. workers, hasn’t reinstated its match, according to spokeswoman Kimberly Freely.

The most common contribution by larger employers is 3 percent if workers save 6 percent of their salaries, Credico said. The average account balance of workers was $71,044, according to the survey, which represents more than 5.3 million plan participants. ..........(more)

The complete piece is at: http://noir.bloomberg.com/apps/news?pid=20603037&sid=aw...

[Newsjock]

1. Heaven forbid the CEOs give up a penny of their pay

That would be un-American!

[RKP5637]

2. When I had it, it was to attract employees and also to entice them to stay. Many

corps. no longer have that problem, people are often begging at their door to work. Bean counters are probably thinking why destroy a good thing. And CEOs are thinking of their next bonus.

[Sherman A1]

5. Agreed

[xchrom]

3. Recommend - let's ya know what kind of person

A corpration is - don't it?

[lumberjack_jeff]

4. Of course not.

The reason they were eliminated was because Bush and the Republican congress eliminated the "top heavy rules" which limited the amount the CEO could contribute to his 401k as a proportion of the contributions made by the little people.

Those rules were established to prevent exactly what is taking place; the 401k is only used by the highest paid employees.

[SoCalDem]

6. And they probably will not.. Once some benefit goes away, even on a temporary basis

it's rarely put back..unless there's a union willing to force the issue. Employees these days are hardly in a position of strength, and employers know it.

Every penny they don't have to "match", is a penny they get to keep.