WELCOME TO 401k PETITION
Many employers just do not have the money to make the 401(k) match due to the recession. Therefore many employers have terminated or suspended their 401(k) match. According to a recent survey, Thirty-four percent of U.S. employers have already reduced or eliminated matching contributions to their 401(k)s. The surveyed also revealed that over the next year, 29 percent of companies plan to reduce or eliminate the matching contributions to save money.
While terminating or suspending the 401(k) match seems to be a necessity for many companies during the recession, many employers fail to realize that existing 401(K) regulations may force them to make contributions to their 401(k) plan.
Existing 401(K) regulations may require a company to make contributions, in order to make sure that the 401(k) plan does not discriminate in favor of the owners and officers of the company. If a 401(k) does discriminate in favor of the owners and officers of the company, then the company must make a Contribution equal to 3% of each employee’s salary.
The 3% Contribution, is often times larger than the normal matching contribution. Companies may also face penalties if they cannot make this mandatory Contribution. Many companies may choose to terminate their plan in order to avoid the penalties.
A pension bailout to suspend these contributions is desperately needed to avoid mass terminations of 401k plans. Please sign the petition and urge Congress to suspend these mandatory contributions.
