SALT LAKE CITY — Not all that long ago, employers statewide and across the country were faced with making difficult decisions to save money. For many, the cuts came at the expense of benefits, including perks like matching employee contributions to 401(k) retirement plans.
Recently, however, that trend has changed and more companies are bringing matching contributions back, prompted by the long-awaited economic recovery.
"We've seen about 1.5 million people (nationwide) hired back in 2010 and the first couple of months of this year," said Jeff Thredgold, economic consultant for Zions Bank. "So you're seeing more and more companies bring either the 401(k) back or bring the match back or enhance the match."
He attributed the trend reversal to improved confidence in the economy and enhanced profitability.
Thredgold said the trend will likely continue as long as the economy continues to improve and companies compete for workers.
"If you have a handful of people you're looking to potentially hire and you can say, 'We have a 401(k) program and there is a (substantial match),' the more incentive people have (to accept your job offer)."
In Utah, one company that made the tough choice to eliminate employer matching was Intermountain Healthcare — the state's largest health care provider and top employer.
"The match for the 401(k) was suspended in 2009," said spokesman Daron Cowley. "That was because of the economy."
He said the suspension of the matching benefit was a cost saving measure aimed at lowering patient costs and preventing employee layoffs.
At the time, all employees were able to contribute portions of their income to retirement after working at Intermountain for one year, with about 18,000 of the organization's approximately 30,000 employees participating. Employees who contributed 4 percent of their incomes received a 3 percent match, Cowley said, although some employees contributed 5 percent and received a 4 percent of match if they had been hired since Jan. 1, 2007, and received different pension benefits than their longer-employed colleagues.
Beginning last year, the suspension was lifted and employees could again receive employer matches up to 4 percent for their contributions up to 5 percent, however, annual pension payout benefits were reduced.
"These modifications were made to increase the long-term stability of the pension plan," Cowley said.
Despite the pension change, reinstating the matching contributions is seen as a positive economic sign, especially given the impact of the most recent recession.
Aaron Call, regional vice president of G&A Partners — an administrative services provider — said he has seen a 55 percent to 60 percent increase this year in local companies reinstating matching contributions to their employee retirement plans.
"Now that companies have weathered the storm and smart-sized their companies … and are becoming profitable again, they want to retain those employees who have allowed them to stay in business," he said.
- Salt Lake officer captured Dillon Taylor...
- Lunch manager on leave after diabetic student...
- North Ogden woman sent to prison in...
- Tips lead police to arrest of public enemy No. 1
- Odyssey Elementary opens doors for...
- LDS missionary critically injured in Oklahoma...
- Stranger donates vehicle to Bountiful...
- Utah County teen made 'swatting' threats...
- Poll: Utahns willing to fight for... 58
- Utah argues for more time to file... 41
- Utah claims top ACT scores for second year 34
- Government regulation has become like... 31
- Lunch manager on leave after diabetic... 27
- State asks for more time to file appeal... 24
- Poll: Majority of Utahns in favor of... 22
- Jay Evensen: Is Provo really an... 22