Source: Fortune
Summary
TTEC, a technology services and outsourcing firm, has paused its 401(k) match for US-based employees due to economic uncertainty. The company hopes to resume the 3% match in nine months if business performance supports it. This move is not unique, as many employers make changes to retirement plan contributions during economic strain. Pauses to 401(k) matching have increased during recessions and the Covid-19 pandemic. Employers may favor making cuts to 401(k) programs over layoffs, and many eventually resume matching, although it may not be as generous.
Our Reading
The numbers tell one story.
TTEC’s pause on 401(k) matching is a familiar move during economic uncertainty. The company’s chief people officer, Laura Butler, cited the need to reassess business performance before resuming the 3% match. This decision may be a sign of things to come, as employers often make cuts to benefits before considering layoffs. The pause may also have long-term effects on employees, who should continue to contribute to their retirement accounts despite the reduced employer contributions.
Employers may favor making cuts to 401(k) programs over layoffs, but this move can have compliance implications when contributions resume. HR teams should remind workers to continue contributing to their retirement accounts, even if the employer can’t match. The pause on 401(k) matching is a reminder that benefits are often the first to go during economic strain.
Author: Evan Null
