The Ignorant Investor

DETROIT (Reuters) - General Motors Corp. is suspending contributions to its 401(k) retirement savings plan for salaried workers, a spokesman said on Thursday.
"We continue to monitor the business in determining when to reinstate the matching contributions," GM spokesman Robert Herta said.

A while back I wrote about the disappearing pension in corporate America. Now one of America's larger employers decides it won't contribute to 401k plans for some of its workers. Remember 401Ks? These were the terrific plans that were supposed to replace pensions, only now GM is basically absolving itself of any responsibility of helping to provide for the retirement of these workers. Without employer contributions, what's left is just a tax-deferred investment account. It's tough to build a really good nest egg when you're not getting decent matching from an employer because you're then essentially relying on the stock market to build it into something you can live on during retirement.

I don't know if this is just GM dealing with its own internal troubles or the start of a wider trend. I hope not. My own employer's matching contribution is only on a measely 10% of whatever I contribute to the plan, assuming I work for the company for 5 years, but I'd hate to see that contribution go.

Fortunately, today's announcement wasn't all bad news for GM workers:

The world's largest automaker was also dropping the requirement that up to 3 percent of worker's contributions and 100 percent of the automaker's contribution be invested in GM shares.

This makes a long-needed change to what must have been one of this country's crappier bargains: "We'll give you money for your 401K, but you have to buy shares in our miserably run company with it." At least now GM's workforce can invest in Honda or Toyota and actually see the value of their shares go up.