“As the economic slump deepens, more companies are expected to join General Motors in suspending matches of contributions to their employees' 401(k) retirement accounts. “GM last week became only the latest on a list of well-known companies trying to conserve cash to weather the downturn by halting 401(k) account matches. Also among them are Goodyear, Frontier Airlines, commercial real estate firm Cushman & Wakefield, broadcast group Entercom and rental car agency Dollar Thrifty Automotive Group. “ The above was from USA Today of October 28, 2008 and indicates a very interesting new, possible growing trend that will probably increase and become especially attractive to companies hardest hit in these tough economic times. The ramifications, if this becomes widespread, are extremely significant, and this is true even on the firm level, whether it involves business clients currently matching 401(k) employee contributions or individuals saving for retirement. Beside costs and retirement savings, there is the obvious concern of the impact on attracting and retaining talent, and the need for development of special compensation packages for key employees. It also indicates that businesses will be making some very tough decisions as a result of this extended, and continued financial and economic crisis. Some firms are already creating internal financial crisis teams. This is a time to be proactive and respond, not a time to wait and react. What is your firm doing?
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access