Lowered Company 401(k) Matching: A Sign of the Coming Apocalypse?
My husband received an email from his employer today announcing “changes to your 401(k) plan.”
Basically, they are lowering the company match from 5% to 4%, and investing the money on a yearly basis instead of on a per-paycheck basis (i.e., the 2009 company match won’t get put in his account until 2010).
Layoffs are looming at his large company, and I’m wondering: By switching from a bi-weekly to a yearly company match, does this mean that they won’t have to pay out the company match for anyone they lay off during the year?
If so, that’s crap.
If not, it’s still crap, but I guess 4% is better than nothing.
Now let’s just hope he survives the latest layoffs.
3 responses so far
I’m hearing that a lot around the blogosphere…
Yikes! I hope even if you were laid off you would get the amount that you’d accrued to that point!
I would guess it depends on what their vesting schedule is like. If someone who is fully vested contributes to the plan during the year but is laid off, they would still need to match the percentages paid in according to the rules of the plan.
However, if you are not fully vested, I don’t think they would be under an obligation to pay it.