Utah County Cuts 401(k) Contribution as Part of Budget Plan

March 11, 2009 (PLANSPONSOR.com) - Salt Lake County Mayor Peter Corroon presented an interim budget plan to the Salt Lake County Council that reduces spending, freezes wages, extends the county hiring freeze and reduces county contributions to employee 401(k) accounts.

As part of the plan, the county’s 3% contribution to employee 401(k) plans will be temporarily suspended effective March 31, 2009 through December 31, 2010. According to a press release, this reduction was chosen instead of furloughs, layoffs or reductions in salary.

Other changes in the plan, according to the press release, include:

  • Change of dental insurance provider for a savings up to $1 million;
  • Extension and expansion of the county’s current hiring freeze; and
  • Merit and COLA reductions – The county had a merit and COLA increase of 3.75% for 2009, but there will be no merit or COLA increase in 2010.

“As you know these are challenging economic times. To balance our budget through 2010 and protect our workforce, we must take some additional steps to tighten our belt both this year and next. Our budget proposal requires difficult choices; however, I can assure you that we are making our best efforts to reduce negative impacts on our employees and their families,” Corroon wrote in a letter to employees, according to the press release.

The county said it will put federal stimulus money to good use and construction of senior centers, libraries and recreation projects will continue to keep workers in their jobs, but the building projects will take advantage of low interest rates and low construction costs.