Employers are once again quietly suspending 401(k) matches, a move last seen during the 2008 recession and the early days of the pandemic.

(SeaPRwire) –   Is the popular 401(k) match facing potential cuts from employee benefits?

This appears to be true for at least one technology services and outsourcing company. TTEC recently suspended 401(k) matching contributions for its employees in the US, as reported by Business Insider on May 8. The Austin-based firm employs approximately 16,000 individuals in the United States.

Laura Butler, TTEC’s chief people officer, stated in an April 30 memo that the suspension would be for nine months, with the company aiming to reinstate its 3% match “should our business performance allow.”

Companies frequently adjust their retirement plan contributions during times of economic difficulty or unpredictability, according to sources speaking with HR Brew. Although many eventually restart their matching, it is not always at the previous level.

What motivates employers to temporarily halt 401(k) matches? As of 2025, over three-quarters (76%) of employers provided a Roth 401(k) or a comparable defined contribution plan, as per SHRM data. Among those offering a defined contribution plan, 74% also included a matching contribution.

Despite their widespread appeal, 401(k) matches frequently suffer reductions during economic downturns. TTEC is not the first employer to suspend its retirement match. Last year, paint manufacturer Sherwin-Williams and Drexel University both took this action, though both reinstated their matches within the same year.

Suspensions of 401(k) matching increased during the recessions of 2001 and 2008, and also during the initial phase of the Covid-19 pandemic.

After healthcare, retirement benefits typically represent one of the largest expenditures in company benefit budgets. Employers might prefer reducing their 401(k) programs if it helps them avoid employee layoffs, noted Craig Copeland, director of wealth benefits research at the Employee Benefits Research Institute. In times of economic pressure, he explained, “one of the strategies employers have adopted, rather than laying off staff, is to scale back benefits.” He added that a company matching 5% of employee 401(k) contributions “could potentially be significant,” enabling them to prevent job losses.

Before suspending 401(k) matching, HR leaders could explore other gradual steps, Vin Smith, a partner at the investment consulting firm Fiducient Advisors, informed HR Brew last year. He suggested that altering vesting schedules or contributing less often, for instance, could “mitigate the negative impact on employee morale.”

Supporting employees in maintaining contributions. Studies indicate that many employers do eventually reinstate 401(k) matching, though it might be less substantial.

Reinstating 401(k) matches carries both financial and regulatory consequences for businesses, Smith and Copeland explained. For instance, an employer might need to conduct nondiscrimination testing to guarantee that the plan does not disproportionately benefit highly compensated employees compared to those who are not highly compensated when contributions recommence.

During periods of suspension or reduction, HR departments ought to advise employees to continue contributing to their retirement accounts, even if their employer is unable to, Copeland stated.

Lowered employer contributions “can significantly impact employees over the long term.” Copeland suggested that HR’s communication to staff should emphasize, “you should endeavor to maintain those contributions so that when we restore the match, you won’t have fallen behind on your end.”

This article was initially published by HR Brew.