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Aren't able to -- -- on Wall Street right now on frankly for each individual says.
Happening to the 401K.
It's one of those employees sponsored.
-- benefits that you get with each employer to hopefully get a match from your corporation if you invest in -- Well some -- suggesting that we might see the death of the 401K.
Not good news is corporations start to cut back joining me this morning is Laura -- and she's global director of street -- to -- it.
Reward consultant good morning Laura thanks for being here that morning thank you.
So you I just recently did -- certainly took a look at 250 companies tell me about the results of that survey what they suggest about whether or not.
We are gonna seek the death of the for a one -- All right the focus.
This survey was to try to understand -- US companies are doing in response to the downturn in the economy.
So we asked what from a laundry list of actions that they might choose to take what are they planning to do in order to maintain cost or perhaps cut costs.
The good news for the 401K.
Is that reports that stats I think are premature error.
We found that only 2%.
Very small number.
Of companies have said they plan they've already cut.
Their match on.
Employee contributions for -- -- And looking forward over the next year only another 4% say they plan to reduce the company match so in this scheme of things it's really pretty small.
Are some of the implications though that you might see the size of that company match declined because as one of the cost cutting measures that's -- way for them to.
Pull -- some some much needed capital in this kind of environment it's definite.
-- tool in the tool cat.
I mean I guess what we found and I think it's important to emphasizes that there are variety of actions that companies are taking.
And you know they're more likely to have reported that there.
Cutting back on company travel or that they're going to increase.
Employee contribution to the health care premium.
Or if worse comes to work layoffs on and of course hiring freezes but.
In the scheme of things the cut back on the employer matched to the 401K just hasn't.
-- into the top.
Some context for us when you take a look at any corporation's 401K plan or even for -- small business owner has so much of the growth in this country in jobs and for small businesses.
What percentage of their coughs are tied to use these benefit programs.
It's a very large percentage.
Of based payroll and benefits typically you know for most US corporations.
Is the single.
Biggest line item in the annual operating budget so this company's move to try to cut costs during the downturn.
You know very obviously is turned its pay and benefits.
I think that you know we hear a lot of ballot in in this current current climate of course is whether or not people will continue to put money into their 401 case.
-- some suggest that for corporations hey look this is a great.
Base of capital and access to capital of god forbid something were to happen.
But on the other hand how many people are actually contributing to the degree that they were contributing maybe a year ago and how many more should.
-- we're not finding that employees are actually stopping to contribute you know stopping their contributions.
What we did find in and companies reported to this to us is that bitterly over -- Of their employees have been shifting their investment choices so backing away from equities and putting their contributions into safer and.
Just a more personal question as it relates to this a lot of people trying to figure out.
How to handle this current climate and how often it's diversified many people don't get their statement other than a quarterly statement to assess -- some people are.
Voracious and they go online and they check every day but how important is -- in this climate to.
Take another look at where -- diversified and make sure that you -- in the right proper types of investments given.
When your plan to retire.
Right in and of course each individual -- circumstance is different depending on their age when they plan to retire and so forth.
That's what financial advisors are for -- and of course were all advised to diversify.
You know pulling your stocks out now if you have a long working -- if you plan to work for another ten years certainly might not be the best thing to do right now.
Right RC -- thank you so much later.
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