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More cuts to 401(k) matches are coming
Today 11:47 AM ET (MarketWatch)
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By Kimberly Blanton

Suspending matching contributions has become somewhat of a recession tradition

To conserve cash, some employers are suspending contributions to their workers' 401(k) accounts. And if this downturn plays out like previous recessions, more will follow.

The handful of employers announcing suspensions in recent weeks include travel companies and retailers hit first and hardest by shrinking consumer demand, including Amtrak, Marriott Vacations Worldwide (MAR), the travel company Sabre, Macy's (M), Bassett Furniture Industries (BSET), Haverty Furniture Cos (HVT), and La-Z-Boy (LZB).

Tenet Healthcare (THC) and a physician practice in Boston on the front lines of providing expensive coronavirus care have also suspended their matches. Employees, not surprisingly, are unhappy with these moves. An emergency room doctor told the Boston Globe (https://www.bostonglobe.com/2020/03/27/metro/coronavirus-rages-doctors-hit-with-cuts-compensation/) that his organization's decision comes as he is "working huge extra hours trying to scrape together [personal protective equipment] and otherwise brace for COVID-19."

Read: Congress has doubled the amount you can borrow from your 401(k) -- but there's a hidden danger (http://www.marketwatch.com/story/congress-has-doubled-the-amount-you-can-borrow-from-your-401k-but-theres-a-hidden-danger-2020-04-06)

Employers are required to give their workers a 30-day notice and cannot stop the match prior to the 30-day period.

Suspending matching contributions has become somewhat of a recession tradition. In the months following the September 2008 market crash, more than 200 major companies rushed to do so, according to the Center for Retirement Research (https://crr.bc.edu/briefs/why-did-some-employers-suspend-their-401k-match/). The firms' primary financial motivation was easing an immediate cash-flow constraint -- not a concern about profits -- the researchers found.

But cutting 401(k) contributions may be a small price to pay for mitigating layoffs, said Megan Gorman, a managing partner with Chequers Financial Management in San Francisco. "It might be a stopgap to help save the business in the long run," she said. A typical employer matches 50% of employee contributions up to 6% of their salaries.

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Carlo4 said:

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I wonder if Cuomo's announcement will be the push the end of the bear market rally.

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Jizzle89 said:

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Who on here subscribes to Manic Trading?

I see it's $149 a month, I think it is worth trying....

Their calls lately (from private twitter to subscribers) have been on fire....

Anyone with a recommendation for or against?

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Prognightmare said:

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Carlo4 said:

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I wonder if Cuomo's announcement will be the push the end of the bear market rally.

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I think what Abbott says tomorrow at his presser carries more weight for the market. No one expected NY, NJ etc to open at the beginning of May.

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AgEng06 said:

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Ok... I'm playing around with thinkorswim using paper money. Someone give me a recent option they are in on to try out...

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gvine07 said:

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Prognightmare said:

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Carlo4 said:

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I wonder if Cuomo's announcement will be the push the end of the bear market rally.

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I think what Abbott says tomorrow at his presser carries more weight for the market. No one expected NY, NJ etc to open at the beginning of May.

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New York is passed its peak, Texas is projected to be 2 weeks out from our peak. Don't expect it to be back to normal in Texas soon

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RoyalOak00 said:

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Just picked up 100 shares. Will buy more if it dips post earnings report on 4/24.

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AgEng06 said:

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Ok... I'm playing around with thinkorswim using paper money. Someone give me a recent option they are in on to try out...

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