U.S. companies trimming retirement help

Oct. 29, 2008 at 1:23 PM
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NEW YORK, Oct. 29 (UPI) -- The list of U.S. companies suspending contributions to employee retirement accounts will likely grow, a survey of companies revealed.

Of 248 companies surveyed by Watson Wyatt, a human resources firm, 2 percent indicated they cut contributions to 401(k) accounts and 4 percent indicated they would likely join their ranks, USA Today reported Wednesday.

Struggling to maintain its cash reserves, General Motors Corp. announced last week it would suspend its 401(k) contributions. Goodyear, Frontier Airlines, and Dollar Thrift Automotive Group had already stopped the practice, the newspaper said.

"I don't think anybody is happy about it, but people are pretty determined," says GM spokesman Tom Wilkinson.

Watson Wyatt senior financial counselor Alec Dike said companies cutting their contributions were "penalizing the folks who are doing the right thing (by) contributing to their retirement."

One company is bucking the trend. Goodyear, stopped making 401(k) contributions in 2003, but plans to resume the practice on Jan. 1.

"We're all excited it's coming back," Goodyear spokesman Scott Baughman said.

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