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Benefits April 19, 2010
NC County Cuts 401(k), 457 Matches
April 19, 2010 (PLANSPONSOR.com) – A North Carolina county has decided to cut back on its 401(k) match to help close a budget gap.
Reported by Nevin E. Adams
Mecklenburg County has announced that it will stop matching 401(k) and 457 deferred compensation accounts of county employees for the remainder of the current fiscal year – that is, through June 30, 2010 – in an effort to close the county’s budget gap. County Manager Harry Jones announced Friday that the change would be effective with the April 23, 2010 paycheck.
According to an update on the County Manager’s website, the change applies to all Mecklenburg County employee deferred compensation accounts except for sworn law enforcement officers (local governments are required by state law to provide a 5% contribution to these employees’ deferred compensation accounts, according to the update).
Suspending the County’s match contribution to 401(k) and 457 deferred compensation through the end of the fiscal year will save approximately $1.4 million, according to the announcement.
Next Year Also?
While the immediate change would be of fairly short duration, in announcing the change, Jones noted, “…it is highly likely that I will propose continuing the suspension of this match contribution next fiscal year. If so, this would be included as part of the overall recommendations for FY2011 employee compensation that will be provided to the Board on May 18.”