SURVEY SAYS – Changed Your Mind About the Match?
Back in November we asked readers about their intentions on the match (see SURVEY SAYS: What Are Your Plans for Your Match? ) – but time has passed, and things may have changed.
Regardless of your decision (or pending decision) – or whether it has changed (or not), I can tell you that I am getting regular inquires about those decisions – and more than one looking for some “company” in holding the line against the “trend.” This week, I’d like to know (again):
“What, if anything, have you decided to do about your 2009 matching contributions?”
The answers to this week’s survey are online HERE
Bonus question Should we compile a list of plans that have made the decision to suspend the match – or is that just adding fuel to the fire?
The answers to our Bonus Survey are online HERE
This week I asked readers (again) - What, if anything, have you decided to do about your 2009 matching contributions?
First off, things clearly HAVE changed - albeit perhaps not as much as some the plethora of announcements might indicate. In our November survey 58% of respondents said they had no changes in mind and 16% said there had been no changes yet - this week 50.4% said they had made no change and 12.4% said no change yet - so there is clearly a trend, and one that supports the sense that one might read from the headlines. However, remember that that means that nearly two-thirds say they have NOT made a change.
Moreover, a nearly identical percentage ( 5.8% ) as last November said that while there had been no change yet, "we're talking about it." Roughly 1.5% said they had reduced, but not suspended their contribution, while another 2.2% said they had made that decision since November 1 (the approximate date of our last survey). As for those suspensions, 12.4% had made that decision, and roughly two-thirds of those had made the decision since last November.
Of course 6% had actually increased their matching contribution (just 1.5% as part of a general benefits restructuring).
Among the more interesting verbatims this week (mainly because they seem somewhat counterintuitive):
"We have changed it, but not eliminated it. The employer match for the 401(k) Plan will be based on the performance of the company, which if applied historically, would have been better in some years than was our fixed match."
'We are actually talking about increasing our match but have not made the decision yet."
"We have decided to leave the match in place in hopes that more associates will participate."
"An increase is being contemplated, but final decision is pending."
And there were some interesting design considerations:
"We announced that if business goals are met by fiscal year-end (May 31) that Executive could bring it back with a retro match for those who continued to contribute through the dry spell + up to a 25% bonus on that amount if it can be afforded."
"We kept the same match formula (50% up to the first 6%), but limited the maximum to $1000 per year. This way the lower paid employees still get the full amount, and it's managers on up that feel the cut."
"No change yet, but there have been a lot of inquiries concerning what options we have for reducing/eliminating profit sharing and/or matching contributions."
But this week's Editor's Choice goes to the reader who noted, "Our company matches 20% up to 15% of wages. So far I have not heard any talk about changing it, and I'm keeping my mouth shut."
Thanks to everyone who participated in our survey!
| We have never had a match. We provide a 6% contribution to all participants regardless of whether they contribute or not (a holdover from an old Money Purchase plan). While there has been some talk about adding a match to incent more participation, there has been NO talk about reducing the 6% (although some members of the committee probably think it will be no problem to reduce the 6% in order to pay for the match). We will be revisiting later this year when we have to restate our plan document. |
| Why stop the match now,,,it gives participants a chance to buy in now when the market is low. |
| We announced that if business goals are met by fiscal year-end (May 31) that Executive could bring it back with a retro match for those who continued to contribute through the dry spell + up to a 25% bonus on that amount if itcan be afforded. |
| We kept the same match formula (50% up to the first 6%), but limited the maximum to $1000 per year. This way the lower paid employees still get the full amount, and it's managers on up that feel the cut. |
| We are a small company and use the safe harbor match so that we, the owners, can max out our deferrals. At our ages and considering how much our income taxes will increase with a Democratic Congress in control not to mention where social security is headed or the shabby state of the economy, etc., we cannot afford to not continue deferring and our firm cannot pass ADP/ACP testing without using the safe harbor match. We also have no plans to lay any employees off even though our income continues to be reduced by the market. |
| As a Federal Employee, I have not heard Congress talk yet about cutting our match. It is most likely only a matter of time before someone in Congress gets the idea so we can share the misery with everyone else. |
| No change yet, but I'm employed by Citi (at least for now) - 'nuff said. |
| An increase is being contemplated, but final decision is pending |
| No change yet, but there have been a lot of inquiries concerning what options we have for reducing/eliminating profit sharing and/or matching contributions. |
| Currently there are no changes to our retirement plan. There are talks to change the contributions scheduled, make the plan a contributory matching plan, and possibly reduce the contribution amounts. The plan is an age based plan which gets very generous for those at age 45 and older. Based on traditional salary comparisions in companies, the current structure of the plan is expensive to the company for this older population. |
| No change yet and trying to fly under the radar as our company looks for opportunities to save money. We have already stopped accruing for profit sharing this year. |
| In addition to the match, we will be making our profit sharing contribution next month, so the plan is strong and contributions continuing as usual. |
| I work for a large national company and we have a safe harbor match. I think that one thing that has slowed down a change is the complications and implications of chaging the safe harbor. |
| Our company let us know in the last 2 weeks that the match will not be made this year. In fact, I'll be lucky if they give me my raise this year. Oh well, at this point I'm happy I even have a job! |
| we are now looking at completely suspending the match |
| Our match is 1.5%. I'm more worried about our 6% profit sharing contribution. |
| We're an oil company and even with the frop in the price of oil, think it's critical to continue our match. We'll make other changes before that one. |
| We are taking practical, proactive steps to protect the financial strength of the company while at the same time keeping people employed. While we have recently had to implement a temporary 4-day work week, employees can receive a partial unemployment benefit on the 5th day and still maintain their full benefits package. This approach makes more sense. The slash and burn approach that many companies are taking only adds to the instability of business and the economy. |
| It is possible that the the match may be reviewed. |
| no control over the issue or knowledge of it |
| Our company matches 20% up to 15% of wages. So far I have not heard any talk about changing it, and I'm keeping my mouth shut. |
| NO 401(k). We have a Calendar Year Profit Sharing Plan which generally is at 15%. For Calendar Year 2008 it was "only" 10% which was greeted with wailing and nashing of teeth. So I point out how much better they are with 10% than thy typical 401(k) of 3-6%. |
| Aon froze its pension plan (which was closed to new entrants back in 2004) effective 12.31.2008, but increased the 401(k) match from 50% up to 100% on the first 6% employees set aside. |
| We might have fully suspended the match, but since we are a Safe Harbor plan and just came off a short plan year, we couldn't drop below the Safe Harbor design minimum. Guess that's a good thing for employees. |
| I don't know what the decisionmakers at the parent company are thinking about (they don't say much to the lowly workers), but so far there hasn't been any change. |
| Beginning January 2009, my employer increased its matching contributions to associates participating in the 401(k) plan: - for the first 60 months an associate participates in the plan, the company increased its matching contribution 2% for each dollar contributed during the year, up to 6% of compensation; and - after an associate has participated in the plan for more than 60 months, the company increased its matching contribution 12% for each dollar contributed during the year, up to 6% of compensation. However, other cost-cutting measures have been implemented. We've been on 'expense/cost reduction' since July. Hiring has been frozen. We laid off about 1-1.5% of our workforce. 2009 merit increase are suspended for 12 months and I doubt we're getting bonuses this year. |
| We have decided to leave the match in place in hopes that more associates will participate. |
| We actually suspended it on 9/1/2008. I'm hoping that eventually the economy will improve and we can start it back up. |
| We don't have a match, so cutting it is pretty much a moot point. We have an ESOP for employer contributions ... not that there have been any of those in the last couple of years either. |
| We are a heavy-highway construction firm, and we have definitely felt the pinch of the hurting economy, particularly the financial institutions crisis. Our volume is down, but we are in a good cash position, so we decided to continue our match, but just reduce the percentage. It is really disheartening to hear other companies suspending their match. |
| We never had a match due to our ESOP success. A match would have brought too many over the total limit on 415 issues |
| We are actually talking about increasing our match but have not made the decision yet. |
| I did mention lowering match to upper management, but we have 88% participation and they feel if we do away with match we would lower participation. However, we currently have profit sharing and Money Purchase Safe Harbor. There will be no profit sharing this year and they are talking about whether to do away with the safe harbor for next year. |
| Fortunately, we continue to do well in the current economy and there is no plan to decrease or suspend the 401(k) match. We are even paying profit sharing contributions! |
| eliminated staff and a 10% wage reduction for everyone else. |
| We have changed it, but not eliminated it. The employer match for the 401(k) Plan will be based on the performance of the company, which if applied historically, would have been better in some years than was our fixed match. |
| As a voluntary plan, we would only impact those who save in their 401(k). So while simple, it does not impact the entire workforce evenly. While the change could be done in the US, it is not as easily done or possible in the rest of the countries in which we operate. Some suggest a paycut as being more equitable. |
| No official word yet but the 'eyes' are telling me a storm is brewing and it's bigger than the match...ala Airplane, "I sure picked the wrong time to stop drinking..." Resume anyone. |
| We have the 3% safe harbor, and recently learned that the IRS does not permit plans using the 3% safe harbor to stop their contributions during the year. The only option is plan termination. What a ridiculous rule, and no doubt a part of the reason why many companies do not start retirement plans. |