Money & Ethics


The Boss Should Bring Back the 401(k) Match

Knight Kiplinger

This is the time for employers to reinstate or raise their matching contributions.



Q: My employer is reporting double-digit earnings growth, has raised its stock dividend and is using corporate cash to buy back some of its shares. But it still hasn't reinstated the 401(k) match it suspended early in the recession. Your thoughts on this, please.

I think it is unethical of your company's management (and board of directors) to make its employees' retirement security such a low corporate priority. It's not smart business, either, because employees may eventually decamp for someplace they will be treated better. Not surprisingly, employee participation in, and contributions to, 401(k) plans have fallen during hard times. This is the time for employers that can afford it, such as yours, to reinstate -- and better yet -- raise their matching contributions.

Q: A close friend of mine and his wife -- a young couple of modest means -- have tried unsuccessfully to conceive a child. Now they are adopting a baby overseas. Through a newsletter e-mailed to their relatives and friends, they're keeping us all posted on the challenges and the rising cost of their adoption. Recently, their e-mails have begun asking each of us -- courteously but pointedly -- to help them by making a cash gift. I'm pulling for their success in something that means a lot to them, but I think this is inappropriate. What do you think?

I'm with you. Becoming a parent always involves great expense, no matter how the child comes into one's life, and the costs continue for years. It's a decision that should not be made without a clear sense of how the bills will be paid. If these parents-to-be mentioned the mounting costs in a private, low-key way to family and close friends, some of them might decide on their own to help out, and perhaps even encourage others to contribute, too. But a direct solicitation by the parents -- in a list-serve e-mail, no less -- is not right.



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