A Rochester cable news channel reports that the match suspension is effective April 1. Paychex also says employees at every level will not receive merit raises for the next 12 months, according to the news report.
The payroll processing company and human resources services provider employs 3,300 people in Rochester and 12,600 nationwide. It matched 100% of the first 3% of employee deferrals into the 401(k) plan and an additional 50% on the next 2% of deferrals, the news channel said.
Paychex said the cost savings will allow the company to keep employees in their jobs.
The company is not alone in turning to its 401(k) contributions to cut costs; however, most plan sponsors responding to a PLANSPONSOR survey said they had no plans to change their 401(k) match program (see SURVEY SAYS: What Are Your Plans for Your Match? ) – a sentiment echoed in a recent employer survey by Mercer (see 83% of Employers Surveyed do not Expect Employer Contribution Changes ).