401(k) match cut 2025: For many American workers, the 401(k) match from their employer is something they count on. You put money into your retirement plan, and your company puts money in too. On average, employers chip in about 4.6% of a worker’s pay, and it’s a benefit that can make a big difference over time.

Sherwin-Williams Ends 401(k) Match Citing Economic Struggles

Now, employees are seeing that the match is just disappearing. That’s the situation facing employees at Sherwin-Williams, an Ohio-based paint company, which recently announced it is suspending its 401(k) match, which previously offered up to a 6% company contribution. According to a report from Cleveland.com, the company blamed the decision on a mix of economic challenges, including weak housing demand, recent inflation, and tariff policies under US president Donald Trump.

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Other Companies Are Cutting 401(k) Matches Too

This move has left some workers worried, and Sherwin-Williams isn’t the first company to do this, and likely won’t be the last. Employers often cut 401(k) matches during tough financial times, like the 2008 financial crisis or the COVID-19 pandemic, as per a Market Watch report.

Earlier this year, Werner Enterprises, a trucking company, also suspended its 401(k) match, as per the report. The change was part of a $40 million cost-saving plan. The company said it was making “difficult but necessary” changes to support long-term growth, as per the Market Watch report.

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Why Losing a 401(k) Match Comes as a Shock to Many Employees

But for employees, the loss of a match can come as a shock.

Karen Friedman, executive director of the Pension Rights Center, said that, “A lot of people just expect that to continue,” as quoted in the report. She noted that these matches can add up over time and help encourage workers to save for retirement in the first place, as per Market Watch.

Can Employers Legally Change or End 401(k) Contributions?

Still, companies are generally within their rights to make these changes. Joy Napier-Joyce, a Baltimore-based attorney who focuses on employer benefits, said companies aren’t required to offer a 401(k) at all. Even when they do, they have the right to change or even eliminate the match, according to Market Watch.

Napier-Joyce added that if employees are unionized, then any match suspension or other changes to a 401(k) plan are typically subject to contractual bargaining, as per the report.

Safe-Harbor 401(k) Plans Require Advance Notice Before Cuts

Lisa Cummings, a Dallas-based attorney who advises companies on retirement plans, said safe-harbor 401(k) plans, which come with certain tax advantages, require companies to give at least 30 days’ notice before making changes, as per Market Watch. But even then, employers can move forward with suspensions when times are tough.

She said that retirement benefits are often the first things to be cut “when costs rise due to economic shifts,” as quoted in the report.

Retirement Benefits Often Get Cut First in Tough Economic Times

Whether this becomes a wider trend remains to be seen, and Cummings pointed out that “Employers typically do not take this drastic step unless faced with very difficult economic circumstances,” as quoted by Market Watch.

However, Cummings said that, “Removing the employer match undermines both retirement readiness and workforce morale,” as quoted in the report.

FAQs

Is it legal for a company to stop matching 401(k) contributions?
Yes. Employers are not required to offer a 401(k) or continue the match and can suspend it, especially during financial hardship, as per the Market Watch report.

Do companies have to give notice before cutting the match?
Only if the 401(k) is a safe-harbor plan. In those cases, employers must give at least 30 days' notice.