In March, Charles Schwab Corp. gained attention in the financial industry when it made the decision to suspend its own 401(k) match. Schwab was plagued by declining revenues, and eliminating the 401(k) match is saving the company millions of dollars each quarter. Despite improved earnings, however, the company has not restored its employees' match and seems in no hurry to do so. The company maintains that it needs more than one quarter of improved results before making that decision.

Schwab is not alone in instituting this kind of change to improve its financial picture. A survey by Hewitt Associates of nearly 500 large employers nationwide reports that 4 percent of those companies decreased their match in 2002. Most blame the economic environment. Ford Motor Company, Goodrich Corp., and Textron, Inc. have cut or dropped their 401 (k) matches, and haven't restored them in spite of an improved outlook. Companies justify their positions by pointing out that the company needs to be fully recovered and not just in the early stage of recovery before returning to previous match levels.

Cutting 401(k) matches is not new. During the 1990s recession, a number of companies made this move. They weren't quick to restore them then, either.