Wal-Mart Will End Employee Profit-Sharing in 2011, Switch to 401(k) Match

[DainBramaged]

(The question is, how many employees participate in the 401K who AREN'T already retired? Another rip off of WalMart employees........)


the largest private employer in the U.S., plans to end its profit-sharing contributions in February, replacing them with matches to employees’ 401(k) retirement plans.

The retailer will match contributions up to 6 percent of eligible employees’ pay, according to a memo obtained by Bloomberg News. Previously, Wal-Mart automatically put up to 4 percent of pay into the profit-sharing plan, according to spokesman David Tovar.

The profit-sharing plan was created in 1971 by company co- founder Sam Walton, according to his biography, “Made in America.” Money saved from the switch will go toward quarterly bonuses for store employees, Tovar said. The Bentonville, Arkansas-based retailer has about 1.4 million employees in the U.S.

Tovar couldn’t immediately comment on how many employees participate in the 401(k) plan. Since taking over in 2009, Wal- Mart Chief Executive Officer Mike Duke has pledged to slow expense growth, aiming to counter five consecutive quarters of sales declines at U.S. stores open at least a year.

During the year ending Jan. 31, 2008, Wal-Mart contributed $724.4 million to 838,955 hourly employees in profit-sharing and 401(k) contributions,(about $862 each) according to a May 2008 company press release. Data for more recent years wasn’t immediately available.

http://www.bloomberg.com/news/2010-10-08/wal-mart-to-end-employee-profit-sharing-in-february.html

[HereSince1628]

1. Odd that a retailer would ask people to save rather than spend

That side of it just doesn't compute.

However, NOT needing to make a match because their employees spend every cent they earn makes this all economically sensible.