Even Execs Hard-Hit by Economy

A new survey found 86% of executives said their shrinking retirement savings will mean working longer, with an average delay of 7 ½ years.

A Reuters news report said the survey by TheLadders.com, a service catering to those making more than $100,000 per year, found that many responding executives were being forced by the economy to dip prematurely into retirement savings or their college funds.

Reuters said the survey found:

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  • Forty percent of those polled said they were forced to use retirement savings to weather the recession.
  • Fifty-eight percent of respondents stopped contributing to their 401k retirement accounts altogether.
  • Half said the recession would limit their children’s college prospects, and 40% said they stopped investing in their children’s college savings accounts (see “Retirement Takes Priority over Saving for College“).

“Nobody’s been spared,” said Robert Turtledove, spokesman for TheLadders.com, in the news report. “This is investment-savvy, smart-managing, high-earning executives. It’s not a knee jerk reaction. I think it’s saying that wherever you are, this is impacting everybody.”

The survey covered 1,162 executives.


Eddie Bauer Suspends Match

Like a number of other companies, Eddie Bauer has announced it is suspending its 401(k) match contributions for 2009 to cut costs.

Tom Helton, the company’s senior vice president of human resources, said the company is still considering other ways to seek savings on benefits, according to the Puget Sound Business Journal. The match suspension is in addition to job cuts and salary freezes.

According to a news release on the company’s Web site, it is eliminating an aggregate 193 positions in the company’s corporate headquarters in Seattle, its information technology center in Chicago, a distribution center in Columbus, and a call center in Saint John, New Brunswick, Canada. The job cuts represent an aggregate of approximately 15% of the non-retail staff.

The announcement said Eddie Bauer is also reducing the size of its Board of Directors and overall board compensation, representing a cash savings of 40% to 50%.

Neil Fiske, president and CEO, has volunteered to reduce his salary by 10% for the remainder of the year.

Eddie Bauer joins other companies suspending their 401(k) match as a cost-cutting measure, including several other retail companies (see “Macy’s Expense Reductions to Include 2009 Match Cuts,” “Saks Suspends 401(k) Match, Drops 1,100 Jobs,” and “Sears Suspends 401(k) Match in Face of Declining Sales“).

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