Survey Says: Our Readers Ring in on 2002 Matching Contributions

If your firm is considering a change, you may be comforted to know that you have some company.  Roughly 25.6% of our respondents have – are getting ready to – or are talking about getting ready to – modify their contribution levels.  And yes, most are talking about reducing those levels (though several haven’t yet broken the news to employees).

Some Reader VERBATIMS :

“We, very unfortunately, made the decision to discontinue our 401k match effective 9/1/01, and originally planned to resume it after the first quarter 2002; however, the events of 9/11/01 have now forced us to not anticipate seeing the match anytime prior to 2003.  Originally, participants were pretty upset and approximately 2% of them stopped their contributions.  4th quarter enrollment was the least in the history of the Plan.  However, in light of recent events, I do believe that the 401k match is about the last thing on their mind at this time since we have now started lay-offs, job eliminations, budget slashes, etc.  Those actions coupled with the daily headlines of the drastic cuts of many major employers has forced our employees into a sense of reality that they have not had for some time.  Needless, to say, Christmas spirit is pretty slim here, as I imagine it is at many places this year.”
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“My company cleverly avoids such complications by not offering a match or profit sharing plan.”
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“On a positive note, our company has decided to immediately vest all 2002 employer matching contributions.  And the match is great at a dollar for dollar on the first 6%.  Previously there was a three year vesting schedule that still applies to employer matching contributions made prior to 1/1/02.  This policy will be reviewed annually.”
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“Our company cannot change the matching contribution due to language in the union contract. There has been no discussion to change the non union part due to the fact the president doesn’t want to short change everyone in the office. What we do is try very hard to limit any overtime in the factory thereby reducing the match cost.”
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“The company has eliminated its 401k match for year 2002.  For 2001 it has made a safe harbor matching contribution.”

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“Our firm has continued its match, but has suspended its discretionary/profit-sharing contribution for about 10 months so far.  While the board discussed whether to make the monthly discretionary contributions, the rumor mill started and people began to panic.  Once the decision not to contribute was announced (along with an explanation and a plan for the future), everyone accepted the news very well.  It really helps employees to know what’s going on, even if the news is not especially good.  There is continuing discussion on modifying (decreasing) the discretionary contribution.”
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“Our company has not discussed modifying the match for the 401k plan.  We are in the oil business and this is just another cycle that we have endured several times over the last 20 years.”
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“We’re leaving our company match as is. Thank goodness!”
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“My company is looking to appease those who say that the matching contribution should not be in company stock (that can not be moved to another investment) by eliminating the company match.”

And this week’s EDITOR’S CHOICE :  “Not that I know about. But you know, sometimes the Administrator of the Plan is the last to know!!”