Citing Obamacare, U-T San Diego cuts contributions to employee retirement accounts
In a memo to employees sent last Monday, U-T San Diego CEO John Lynch said the company would suspend matching contributions to employees' 401(k) accounts. In the note, Lynch cites "the challenges of a difficult economic recovery." But, he says, "The Company also has experienced significant additional expense due to Obamacare."
Reached by email, Lynch said U-T didn't discuss its "challenges as a private company" but wrote, "Suffice it to say our health care expenses have gone up significantly. Hopefully, our financial goals and budgets will be achieved in 2014 and will ultimately match."
David Nather reported in Politico last year that businesses employing more than 50 people will have to pay some per-employee fees. In a speech last summer, Lynch reportedly said it would cost the company a half-million dollars.
Don Bauder reports that some U-T employees fear the move presages layoffs.
Here's the memo:
We have made great progress in transforming from a newspaper, to a multi-media Company. However, the media business continues to face the challenges of a difficult economic recovery. The Company also has experienced significant additional expense due to Obamacare.
Our 401k plan match is a discretionary match. Recently, it has been the Company’s practice to match 50% of your contribution, up to the first 6% of your salary. With that in mind, please be advised that we will temporarily suspend the Company match on the 401k effective 1/1/2014.
As our business stabilizes, we will readdress the match. Additionally, the Company will reserve the right to make an annual matching contribution, at the end of the year, if the Company is successful in meeting our 2014 financial goals.
Despite this temporary change, please remember that saving for your retirement through the Company’s 401k plan should remain a priority. If you have any questions about your investment options, or would like to speak to a Wells Fargo professional regarding your retirement, please reach out to them at www.wellsfargo.com/retirementplan<http://www.wellsfargo.com/retirementplan> or by phone at 800-728-3123