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The Markets July 6, 2009
Atlanta Firm Reinstates Match
Zep Inc. will begin contributions to its employees’ 401(k) retirement accounts this month, nearly six months after it suspended them as part of a plan to return to profitability.
Reported by Rebecca Moore
The Atlanta Journal-Constitution reports that Mark R. Bachmann, executive vice president and chief financial officer, said the maker of disinfectants, deodorizers, and other maintenance products will give 25 cents for every dollar the employee contributes, up to 6% of salary. By January, Zep projects, it will increase its contribution to 50 cents for every dollar an employee gives, up to 6% of salary—what the match was before it was suspended early this year.
The company said it made the move to signal its belief that the economy is beginning to turn around, according to the news report. Zep announced the match suspension, along with executive pay cuts, in January (see “Atlanta Chemical Firm Joins List of Firms Halting 401(k) Match“).
When companies announce a match suspension, they often say the match will be reinstated when the economy improves. However, a recent survey found that only three in 10 respondents said they believe 401(k) matches will be reinstated, while 23% said they will not be reinstated and just under half (47%) indicated they are not at all sure (see “Workers not Confident Benefit/Salary Cuts Will be Restored“).