Will San Diego Gas & Electric be the next corporation to suspend or reduce their company match program? What would the consequences be?

Matching 401(k) contributions is one of the most popular benefits San Diego Gas & Electric offers. A recent study showed that on average, employees who don’t maximize the company match leave $1,336 of possible retirement money on the table each year. So obviously a suspension of these benefits could dramatically change employees' retirement plans. 

To get a better idea of what an end to 401(k) Matching would look like, let’s take a look at ExxonMobil. ExxonMobil announced recently that they will no longer be matching U.S. employees' contributions to their retirement savings plans. The suspension of these benefits officially began on October 1st, . According to Reuters, ExxonMobil has now experienced “its first back-to-back quarterly loss in 36 years because of the drop in demand during the novel coronavirus pandemic.” 

ExxonMobil has two savings plans available to employees, the first is the U.S. ExxonMobil Savings Plan (EMSP) and the second is the U.S. Supplement Savings Plan (SSP). The company was matching a 6% minimum employee contribution with 7% of the participant’s pay. These match programs will be reinstated beginning on October 1st, per Reuters. 

When benefits are frozen, employees in the mid-to-late portion of their career are usually hurt the most. If your company match program does end, it’s a good idea to calculate exactly how much this will affect your retirement savings plan. Forbes recommends maintaining your retirement contributions and even increasing them if you have the funds. This can help compensate for the loss of benefits.

Before rolling over your 401(k), take stock of the broader benefit structure San Diego Gas & Electric has in place for you. According to publicly available information, San Diego Gas & Electric maintains an active defined benefit pension plan, which provides retirement income based on factors such as years of service and compensation history. San Diego Gas & Electric also offers retiree healthcare benefits to eligible employees, which can provide meaningful coverage for those who retire before reaching Medicare eligibility at age 65. Understanding how each San Diego Gas & Electric benefit interacts with the others inside your retirement plan gives you the confidence to make well-informed decisions.