More 401(k)s in Trouble

I knew this was coming, but it hurts to see it all the same. I wrote late last year about how more and more companies are reducing, suspending, or eliminating the matching funds they contribute to their employees' 401(k)s. As expected, new names keep joining the list. These recent arrivals announced their changes in this calendar year:

It's easy to ignore this trend, given our current lousy economy. Companies have to look everywhere they can for money to save. By making these cutbacks, they may be able to keep more people employed. I can agree with that -- to a degree.

On the other hand ...
But there's another side to the story. For so long, pensions were a traditional part of the American corporation. Employees toiled for their employers, and in return, they were supported in retirement with a mostly guaranteed income. Then times changed. These "defined benefit" plans morphed into "defined contributions" plans. Companies shed their pensions and introduced retirement vehicles such as 401(k)s. The responsibility for having enough to live off of in retirement was shifted -- from the employer to the employee. If the worker didn't save enough, or didn't choose effective investments within the plans, the worker suffered.

Employers, having shed their risk, often promised to match employee contributions, which seems to me like the least they could do. But now we see many companies cutting back on even that paltry effort. Essentially, many companies now take no responsibility at all for their workers' futures. Given most people's lack of savvy about money and investing, that doesn't bode well for employees.

Don't trust your financial future entirely to a company that may not care enough to support it. Unless you have better options, make sure you're participating in your company's 401(k) plan (if there is one), and make the most of it.