The Markets January 5, 2009

GateHouse Media Discontinues 401(k) Match

GateHouse Media has become the latest company to suspend its 401(k) match, according to a report in Editor&Publisher.
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In a memo to employees, GateHouse Media said it had determined to discontinue the discretionary employer matching contribution under the 401(k) plan effective January 1. The memo, from GateHouse Media CEO Michael Reed, said that the firm would revisit the issue and “hopes to be able to provide this discretionary benefit under the 401(k) Plan at some time in the future.” The plan remains available for employee contributions.

GateHouse Media, Inc., headquartered in Fairport, New York, describes itself as one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites.

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A list of GateHouse Media publications is available at http://www.gatehousemedia.com/publications/.

Other Decisions

The firm is the latest of several to suspend their 2009 matching contributions as 2008 wound to a close, including Sears (see “Sears Suspends 401(k) Match in Face of Declining Sales“), TheDenver Post (see “Denver Post Latest to Suspend 401(k) Match“), Unisys (see “Unisys Cuts 401(k) Match“), Starbucks (see “Starbucks 401(k) Match Goes Discretionary“), Motorola (see “Motorola Freezes Pension, Suspends 401(k) Match“), and FedEx (see “FedEx Suspends Match, Cuts Pay“).

However most plan sponsors responding to a recent PLANSPONSOR survey said they had no plans to change their 401(k) match program (see “SURVEY SAYS: What Are Your Plans for Your Match?’)—a sentiment echoed in a recent employer survey by Mercer (see “Most Employers Don’t Plan to Reduce Contributions’). And Dollar Thrifty Automotive Group, Inc., recently reinstated its match after a suspension (see “Dollar Says Reinstating Match “Right Thing to Do’’).

 

IMHO January 2, 2009

IMHO: Trend Spotting

Here’s a headline you won’t see this week: “Nobody Cut Their 401(k) Match Today.″
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That’s right, even though there is a very good chance that it will be an accurate statement on just about every day, I’m betting it won’t even make its way into the business briefs section, much less a newspaper headline.
Not that employers aren’t making decisions to cut back on, or even suspend, their 401(k) match. On the other hand, you don’t have much trouble keeping up with that activity. Regardless of plan size or industry, these days, pretty much any plan that takes that step can count on making headlines—and every article beneath those headlines spends at least a sentence or two recounting the latest list of 401(k) match casualties.
Even in our publications, sadly. Let’s face it, it’s “news.”
With such incessant coverage, it’s hard to shake a sense that we have the makings of a trend—particularly for plan sponsors. Indeed, for employers looking for some respite in one of the more challenging economic times in memory, such coverage surely plants at least the seed of doubt about the necessity of the financial obligations attendant with such commitments.
Those developments notwithstanding, I’m pretty sure that, when it comes to their matching contributions, the vast majority of the tens of thousands of employers that offer 401(k) plans will make them in 2009 at the same level they did in 2008—and as they did in 2007, though you may never see a headline to that effect (a rare exception: “Most Employers Don’t Plan to Reduce Contributions“).
That said, I’m not altogether sure where one crosses the line between a series of related occurrences and “a trend”—when the tipping point is reached, the Rubicon crossed….
What I do know is that we are still at a point where the decision to suspend a 401(k) match is “news.” And I dread the day—should it ever come—when it isn’t.

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