Data & Research March 11, 2009

E&Y: More Employees Ask about Early Withdrawal

Ernst & Young said its Financial Planner Line saw a dramatic increase in employee inquiries about penalties and tax implications associated with early withdrawals from 401(k) plans.
Reported by

The announcement said that of all the inquiries to the call center discussing retirement planning issues, the number of questions about 401(k) withdrawal penalties jumped from 1% in the third quarter of 2008 to 22.5% the following quarter.

Lynn Finkelstein, Ernst & Young’s national director of Employee Financial Services, noted that the Financial Planner Line has also seen an increase in the number of debt-related calls (2.5% in the third quarter to 5.8% in the fourth quarter of all calls), as people are concerned about paying their bills with diminished resources.

More information is available at www.ey.com.

 

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The Markets March 11, 2009

Ohio Company Joins List of Those Cutting Match

Ashtabula, Ohio-based Molded Fiber Glass Companies has discontinued its 401(k) match.
Reported by

Larry Davis, vice president of human resources, said the company suspended the match, effective this past week, due to the effect of the economic downturn on business, according to a report on insurancenewsnet.com. Davis said two industries the company serves that were hit hardest by the downturn are the automotive and heavy truck businesses.

Molded Fiber Glass had provided a 100% match for the first 4% that employees contribute to the company’s 401(k) plan, followed by a 50% match for the next 2% contributed, the news report said. The plan has roughly $25 million in assets and 1,600 plan participants.

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Davis said the company plans to reinstate the match in the future.

Molded Fiber Glass Companies joins a growing list of firms suspending or reducing their match as a result of the economic downturn (see “What to Consider Before Cutting the Match’ and “IMHO: “Passing’ on the Ammunition’).


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