Benefits August 12, 2003

Maryland Puts 401(k) Match Out To Sea

August 12, 2003 (PLANSPONSOR.com) - In a move that will save up to $20 million annually, the state of Maryland has suspended its employer match for its 401(k) and related retirement plans.
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With the cut, which went into effect at the start of the new fiscal year, the state will no longer match state employee contributions dollar-for-dollar up to $600 per year. The matching plan, which had been in place since 1988, instead was left on the cutting room floor as the state’s General Assembly scoured the budget for savings during this year’s session, according to a Baltimore Sun report.

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The move has the potential to impact approximately 50,000 members of the state’s 80,000-person work force who are eligible for tax-deferred retirement programs, said Arthur Caple Jr., executive director of the Maryland Supplemental Retirement Agency. However, of those, only about 40,000 (80%) participate in the programs and will notice the elimination of the match.

This after state employees have already endured their share of belt-tightening which includes no cost-of-living raises in more than two years, and hiring freezes coupled with the continued elimination of vacant positions have meant greater workloads. Last month, Governor Robert Ehrlich Jr announced an additional round of $208 million budget cuts, which included 83 layoffs and 880 vacant jobs slashed.

However, the cuts were necessary, and as Ehrlich spokesman Henry Fawell put it, cutting the match was a better alternative than possible staff reductions. “It was a cost-saving measure that is certainly better than having to consider additional warm-body layoffs,” Fawell said.

Dubious Company

Maryland is definitely not alone in its decision, although recent high-profile employer match nixes have been an almost exclusive private employer club. Among them:

Further, the move comes from a state that has seen its share of defined benefit travails this year. Just recently, theRetirement and Pension Systemannounced a restatement of its fiscal year earnings after an error was discovered by an outside firm responsible for tracking the fund’s performance (See Maryland Pension Fund Returns Lower Than First Reported ).

This was after Baltimore money manager Nathan Chapman Jr pleaded not guilty to charges of defrauding the pension system and “looting” his own companies in July (See Chapman Pleads Not Guilty in Maryland Fraud Case ). Additionally, a former trustee of the pension system, Debra Humphries, was indicted on perjury charges after she allegedly lied about cash and gifts worth more than $46,000 authorities say she received from Chapman (See “Relationships” Entangle Maryland Pension Fund ).

Benefits August 11, 2003

Study: Stressed Workers Can Be Sick Workers

August 11, 2003 (PLANSPONSOR.com) - Workplace stress directly influences worker safety and health, a new research report asserts.
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According to the report, Stress at Work, from the federal government’s National Institute for Occupational Safety and Health (NIOSH), stress can take a physical toll on employees – particularly with employees suffering from cardiovascular disease, musculosketal disorders (particularly back problems), and psychological disorders (particularly depression).

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Stressed-out employees are more likely to suffer on-the-job injuries and could be more in line for suicide, cancer, ulcers and an impaired immune function, the NIOSH report said. The report cites a Journal of Occupational and Environmental Medicine study that found health-care expenditures are nearly 50% higher for stressed out workers.

Possible tipoffs of a stressed out worker often include: headaches, sleep disturbances, difficulty concentrating, short temper, upset stomach, job dissatisfaction, and low morale.

“Stress sets off an alarm in the brain, which responds by preparing the body for defensive action,” the NISOH report asserted. “The nervous system is aroused and hormones are released to sharpen the senses, quicken the pulse, deepen respiration and tense the muscles.”

Workplace Stress Factors

NIOSH listed potentially stressful job conditions:

  • a lack of participation by workers in company decision making, sometimes worsened by poor internal communications
  • a poor social environment with a lack of support from coworkers and supervisors
  • conflicting or uncertain job expectations
  • job insecurity and lack of opportunity for growth
  • unpleasant or dangerous physical conditions such as crowding, noise, or air pollution.

“When stressful situations go unresolved, the body is kept in a constant state of activation, which increases the rate of wear and tear to biological systems,” the NIOSH researchers wrote. “Ultimately fatigue or damage results, and the ability of the body to repair and defend itself can become seriously compromised. As a result, the risk of injury or disease escalates.”

Steering Clear of Stress

NIOSH also provided a series of recommendations about how to avoid workplace stress:

  • ensure the workload is in line with workers’ capabilities and resources
  • clearly define workers’ roles and responsibilities
  • give workers opportunities to participate in decisions and actions affecting their jobs
  • improve internal communications.

A copy of the report is available at http://www.cdc.gov/niosh/stresswk.html .

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