The Center for Retirement Research at Boston College has compiled a chart of all the companies known to have suspended their 401k matching contributions because of the COVID-19 pandemic.
The chart includes 46 companies total, representing 410,313 401k plan participants, or 0.69% of the total 59,100,000 active 401k participants based on 2018 Form 5500 filings with the U.S. Department of Labor.
The biggest 401k plan by far to announce a suspension of company matching contributions is Best Buy Co., Inc., with 118,177 participants. Best Buy announced the suspension on April 15, 2020, along with a variety of other actions intended to help the consumer electronics retailer weather the pandemic financially.
Among those actions were temporarily furloughing approximately 51,000 domestic hour store employees, including nearly all part-time employees; CEO Corie Barry foregoing 50% of her base salary, company executives reporting directly to the CEO taking a 20% reduction in base salary and members of the Board of Directors foregoing 50% of their cash retainer fees through at least Sept, 1, 2020.
“As you would expect, we are focused on making the difficult decisions necessary to ensure that at the end of this crisis Best Buy remains a strong, vibrant company,” Barry said in the April 15 release.
According to an April Willis Towers Watson survey of 816 U.S. companies, 12% said they suspended matching contributions for retirement plans, with those operating in hard-hit industries like retail and business services more likely to report doing so.
Another April survey, this one from Plan Sponsor Council of America (PSCA), found more than 20% of large organizations indicated they are suspending matching contributions, while only 3.6% of small plans have moved to do so.
“Cutting matches is one of the milder things that a company can do” to address a sudden plunge in revenue, Alicia Munnell, CRR’s director, told AARP back in April during the height of the pandemic. “I do expect to see a lot more companies that are lucky enough to still have some revenues coming in cut their employee match. I would expect that they restore the match within a year or two after this crisis ends.”
Top 10 401k Match Suspenders
Here is a summary of companies with the largest 401k plans by participants that have suspended their 401k match, based on the CRR table:
- BestBuy (consumer electronics retailer, Richfield, Minn.) 118,177 participants
- Quest Diagnostics (clinical laboratory, Secaucus, N.J.) 45,600 participants
- LabCorp (clinical laboratory, Burlington, N.C.) 35,832 participants
- AutoNation (auto dealer, Fort Lauderdale, Fla.) 26,296 participants
- Amtrak (railroad, Washington D.C.) 18,780 participants
- iHeartMedia (radio/media, San Antonio, Texas) 13,093 participants
- Syneos Health (biopharmaceutical services, Morrisville, N.C.) 11,678 participants
- Bronson Healthcare (healthcare provider, Kalamazoo, Mich.) 11,240 participants
- Rockwell Automation (industrial automation/IT, Milwaukee) 8,717 participants
- Henry Schein (Medical/dental equipment, Melville, N.Y) 7,794 participants
Notably absent from the CRR summary are a couple of large companies in Dallas-based Tenet Health (119,660 active 401k participants) and Marriott International, which has more than 145,900 active 401k plan participants per Brightscope. Marriott started delaying matching contributions in March, saying it would put off payments until September 2020, while in late March Tenet Health postponed its annual 401k match until later this year for other eligible employees who are still working. The company is also continuing to pay the 401k match for 500 furloughed corporate and nonpatient care workers.
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