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Benefits September 29, 2004
Kmart to Boost 401(k) Contributions
September 29, 2004 (PLANSPONSOR.com) - Kmart has
instituted more extensive matching contributions to its
401(k) plan in a move to increase employee morale and reward
loyalty after the loss of major retirement savings a year
ago.
Reported by Kip McDaniel
Kmart will now match dollar-to-dollar on employee contributions up to 3% of total earnings, and 50 cents per dollar on contributions reaching 8%. Currently, Kmart only matches 50 cents to the dollar on contributions up to 6%, according to The Detroit News.
The move is seen as a measure to raise employee morale and reward loyalty after many lost a significant part of their retirement nest egg when 500 million shares of company stock were cancelled last May. The company’s official position is that benefits increases were a measure taken to induce top-flight employees to stay with the company, as well as entice new workers to join their ranks.
As cost-cutting moves, the company has reduced employee hours and jobs and switched health-care providers. Kmart entered Chapter 11 bankruptcy in 2002.