The Albany Times Union reports that employees were handed a memo announcing the match suspension as they changed shifts at 3 p.m. on Friday. A wave of similar announcements from 401(k) sponsors across the country have been reported in recent months (See More Companies Decide to Go “Matchless”).
According to the Times Union, the St. Peter’s memo included the announcement that the company is also eliminating merit pay in 2009. However, the memo said reductions would not include changing plans to construct a new building and renovate existing buildings, as President Steven P. Boyle explained that the building project is key to St. Peter’s long-term success.
Hospital spokesman Elmer Streeter pointed out to the Times Union that the hospital made no changes to its pension plan. Nearly all of the hospital’s 4,622 employees are eligible for the pension, and it takes three years to fully vest in the plan. The hospital guarantees that the pension fund will earn 6% each year, and because of the drop in the stock market, St. Peter’s expects to make an unbudgeted $4 million contribution to the plan, Streeter said.
St. Peter’s said suspending the match contributions to the 403(b) plan will save $1 million. About 1,200 employees participate in the plan and the hospital matches contributions up to 1.25% of an employee’s salary.
Eliminating merit pay will save St. Peter’s $2.3 million and the change applies to all employees including top executives.
The news report said the hospital also has cut advertising, travel to conferences, overtime, and the use of temporary nurses, according to the memo.