That’s right, even though there is a very good chance that it will be an accurate statement on just about every day, I’m betting it won’t even make its way into the business briefs section, much less a newspaper headline.
Not that employers aren’t making decisions to cut back on, or even suspend, their 401(k) match. On the other hand, you don’t have much trouble keeping up with that activity. Regardless of plan size or industry, these days, pretty much any plan that takes that step can count on making headlines—and every article beneath those headlines spends at least a sentence or two recounting the latest list of 401(k) match casualties.
Even in our publications, sadly. Let’s face it, it’s “news.”
With such incessant coverage, it’s hard to shake a sense that we have the makings of a trend—particularly for plan sponsors. Indeed, for employers looking for some respite in one of the more challenging economic times in memory, such coverage surely plants at least the seed of doubt about the necessity of the financial obligations attendant with such commitments.
Those developments notwithstanding, I’m pretty sure that, when it comes to their matching contributions, the vast majority of the tens of thousands of employers that offer 401(k) plans will make them in 2009 at the same level they did in 2008—and as they did in 2007, though you may never see a headline to that effect (a rare exception: “Most Employers Don’t Plan to Reduce Contributions“).
That said, I’m not altogether sure where one crosses the line between a series of related occurrences and “a trend”—when the tipping point is reached, the Rubicon crossed….
What I do know is that we are still at a point where the decision to suspend a 401(k) match is “news.” And I dread the day—should it ever come—when it isn’t.
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A Chicago Sun-Times article, quoting a December 30 memo to employees from Sears Holdings Corp. Interim CEO Bruce Johnson, said the match suspension is effective January 31, 2009 and that the company will consider reinstating it when its financial performance improves.
“In this difficult economy and fast changing retail environment, we need to remain flexible and focused on improving our operating metrics and continuously look for ways to reduce expenses,” Johnson said in the memo. “Remaining committed and steadfast in our attention to our financial priorities—improving margins, tightly controlling expenses and focusing on cash generation—should position us to perform well when the economy improves. We are embarking on a New Year. Many tough business decisions will be made now and in the coming year.”
Hoffman Estates, Illinois-based Sears now matches 100% of the first 3% of an employee’s contribution, and matches 50% up to the next 2%, a Sears spokeswoman told the newspaper Friday.
Sears will resume its 401(k) match when its financial performance improves, Johnson said.
Sears has appointed new executives of its business units, closed unprofitable stores and offered extended sales as it fights to turn around declining sales and earnings.