Data & Research December 11, 2008

Most Employers Don't Plan to Reduce Contributions

Even as news reports of companies suspending employer match contributions to defined contribution plans continue, a Mercer survey reveals 83% of employers do not expect to reduce their level of employer contributions.
Reported by

However, 17% of polled employers are considering doing so, according to a Mercer press release.

More than three-quarters of respondents (77%) said they expect to review investment and administrative fees, which Mercer said may be due to pressure from regulators as well as the decline in investment values. Eighty-five percent of respondents reported they will likely enhance employee education and communication regarding investment choices, objectives, and options—and three-quarters of respondents will likely review their fund line-ups, Mercer said.

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In line with their anticipated actions, when asked to gauge employee concerns related to the economic turmoil, 54% of respondents said that employees expressed a significant level of concern about the impact of economic turmoil on their retirement investments, compared with 37% who said employees expressed significant concern about the health of the company, and 34% who said employees have a high level of anxiety regarding their job security.

For defined benefit plans, employer focus will be primarily on understanding and reducing risk. Changing investment strategy (46%) is reported by survey respondents as the most likely method companies will take to reduce risk rather than changing funding policies (31%). Twenty-four percent of respondents are considering cutting back or stopping accruals, but only 4% say they are very likely to do so.


Data & Research December 11, 2008

Kodak Suspends 401(k) Match

Kodak announced it is suspending its 401(k) match and not increasing executive compensation.
Reported by

Saying that “most signs indicate that we may be facing a prolonged global recession,” Kodak Chairman and CEO Antonio M. Perez said the company is taking steps to ensure its solid position remains until the economic recovery.

Kodak announced that where permissible by law, its executives will not receive a salary increase in 2009, and that it will suspend for 2009 the company’s U.S. 401(k) match. A report on the Web site of an NBC news station in Albany said that company management also does not expect a payout in 2009 for the executive Leadership Stock program that is based on 2008 performance.

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Kodak has withdrawn its full-year 2008 operating profit and sales forecast “because of the deepening global recession and changes in the value of the U.S. dollar,” the news report said.

However, according to Perez, “Kodak is financially strong and we are well positioned to manage through this economic downturn.’

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