NEW YORK (Reuters) - Coffee shop chain Starbucks Corp has informed employees it won’t guarantee matching contributions to their 401(k) retirement plans next year.
In a memo sent to workers last week, Starbucks said it will switch to a “fully discretionary match” program from a fixed employer match as of January 1.
“This means that at the end of calendar year 2009 and future years, Starbucks will make a decision whether or not to make matching contributions to plan participants,” said the memo, which was emailed to Reuters.
“If a matching contribution is made, Starbucks may do so using a rate that is different than the tenure-based fixed rate currently in place for the 2008 plan year,” the letter added.
Starbucks spokeswoman Deb Trevino told Reuters that future company contributions would be discretionary, based on company performance. She confirmed that the letter had been sent to employees.
A growing list of U.S. companies have announced plans to suspend or cut 401(k) benefits to save costs in a recession, including FedEx Corp and Eastman Kodak Co.
Earlier this month, Starbucks said it does not expect to meet Wall Street estimates for its first quarter that began in late September and pledged to ramp up its cost cuts.
The news of the plan change was first reported on the website of The Wall Street Journal.
Reporting by Michele Gershberg and Karen Jacobs in Atlanta; editing by Jeffrey Benkoe
Our Standards: The Thomson Reuters Trust Principles.