Remember that 401(k) match we promised you when we axed the pension plan? ........

[marmar]

:yoiks:



from the NY Times:



In Need of Cash, More Companies Cut 401(k) Match

By MARY WILLIAMS WALSH and TARA SIEGEL BERNARD
Published: December 20, 2008


Companies eager to conserve cash are trimming their contributions to their workers’ 401(k) retirement plans, putting a new strain on America’s tattered safety net at the very moment when many workers are watching their accounts plummet along with the stock market.

Suspending the Match When the FedEx Corporation slimmed down its pension plan last year, it softened the blow by offering workers enriched 401(k) contributions to make up for the pension benefits some would lose. But last week, with Americans sending fewer parcels and FedEx’s revenue growth at a standstill, the company said it would suspend all of its contributions for at least a year.

“We will have to work more years and retire with less money,” said Lee Higham, a 44-year-old senior aircraft mechanic at FedEx, who has worked there for 20 years. “That’s what we are up against now.”

FedEx is not the only one. Eastman Kodak, Motorola, General Motors and Resorts International are among the companies that have cut matching contributions to their plans since September, when the credit markets froze and companies began looking urgently for cash. More companies are expected to suspend their matching contributions in 2009, according to Watson Wyatt, a benefits consulting firm.

For workers, the loss of a matching contribution heightens the pain of a retirement account balance shriveling away because of the plunging stocks markets.

“We are taking a beating,” said another FedEx mechanic, Rafael Garcia. “In a year, I lost $60,000 of my 401(k). You can’t make that up.” ........(more)

The complete piece is at: http://www.nytimes.com/2008/12/21/your-money/401ks-and-similar-plans/21retire.html?_r=1&hp

[Juche]

1. W/o unions and the ability to organize

Employees are dependent on the goodwill of employers. And that dries up pretty quick. W/o a union you have no real leverage you can use to get good benefits. A few weeks ago the NYT held wages for all but their union workers stable and didn't give raises or COL adjustments.

[MiniMe]

2. It all depends on how the plan was originally written

The way they write 401k plans, the match is not usually written into the plan, it is written as a discretionary match. Almost every plan is written that way, I found out about it when a company I was working for changed 401k administrators and they wrote a new plan up. The plan itself is to protect the companies, not to protect the workers. The codes on what constitutes a 401k is and how the contributions can be made are what protect the workers.

I am not defending what the companies you mentioned did at all, just pointing out what I have seen about how they write the plans themselves from what I have seen.