FedEx joins companies dropping 401(k)s
FedEx Corp. has announced it is the most recent U.S. company to at least temporarily cancel all 401(k) matching contributions for its employees.
ABC said in addition to dropping all 401(k) payments for at least one year, the company suspended all pay raises for 2009 and implemented a 5 percent pay cut for all its salaried workers.
The company’s temporary suspension of all matching payments to the retirement system is similar to actions already taken by Motorola, Ford and General Motors.
While such cuts will help save the companies funds during the current economic crisis, workers say the 401(k) system was a key benefit.
That was one of the reasons that I stuck around with the company, a FedEx compliance manager identified only as Jacob said.
That’s free money right there that I couldn’t match at other companies.
It’s disappointing because we expected better, said Janet, a 26-year-old worker with another company embracing 401(k) cuts.
Robert Christensen of the labor law firm Fisher & Phillips told ABC News some companies set up 401(k) agreements so that they can revoke matching payments at any time.