401k Match Cuts Becoming Popular
Recently GM, Ford, Frontier Airlines, and some other iconic companies announced that they were suspending matching 401k contributions. I find this to be a disturbing trend that I really hope does not catch on. 401k matches typically average just 3% of payroll expenses, yet many people are heavily dependent on them to fund their retirement at some point.
Employers Playing the Economy Card with their Employees 401k’s
It seems as through many companies are looking at the current economic slowdown as a means to cut back on essential employee benefits. Granted, Ford and GM are in a really tough pinch when it comes to cash and may not survive without bankruptcy, but I can foresee a number of companies following suit ‘because these are tough economic times’.
In GM and Ford’s case, they decided to cut 401k contributions before they decided to cut private corporate jets and other forms of lavish spending. Shame on them.
How Big of a Benefit are your Matching 401k Contributions?
To me, 401K matching contributions are the BIGGEST benefit, even beyond medical coverage. My employer offers a very healthy match that provides me much more of a cash benefit than any medical insurance plan. If my employer were to cut the match, I would seriously consider finding a new job. If a company is that desperate for additional cash flow, it’s probably time to look elsewhere.
In my humble opinion, if an employer is cutting back essential benefits like 401k matches they are either:
A. In a very tough financial situation.
B. Not valuing their employees and looking for excuses to cut costs.
Either way, it’s probably time to find greener pastures.
401k Match Discussion Topics:
- Has your employer decided to cut back on your 401k match?
- How much does your employer match?
- Where does your 401k match rank amongst all of the benefits that you receive?
- Do you think profitable companies are justified in cutting employee benefits during this economic downturn?
Take the Poll!