The 401(k) contributions will resume when the company deems it affordable. In addition to eliminating the match, the company will also reduce the pension and retiree health care benefits offered to salaried employees hired after December 31.
Not all news is bad for Visteon employees. The auto-parts supplier says that employees would get the total benefit of the company’s previous contributions immediately, rather than having to wait five years to be fully vested.
In addition, the company plans to grant substantial raises to a large group of employees, following the outcome of its study of compensation levels, which found:
- two-thirds of Visteon salaried employees were paid within 10% of the average,
- but over half of the remainder were underpaid.
Adjustments were made to remedy the situation.
Other companies in the auto sector have made similar reductions in 401(k) matches recently. DaimlerChrysler’s Chrysler Group and Delphi Automotive Systems have suspended their matches. General Motors has trimmed its matches.
More recently, Ford Motor Company announced that it would cease making matching payments to its employees’ 401(k) contributions as a cost cutting measure.