Could your employer take away your 401(k) match? Sherwin-Williams just did it.

By Charles Passy

When businesses face a financial pinch, retirement benefits are often the first things to be cut, experts note

When a company suspends its 401(k) match, it amounts to a pay cut, some workers say.

For countless American workers, the 401(k) company match is simply a fact of life: They contribute regularly to their employer-sponsored retirement plan - and in turn, the employer kicks in a matching amount. The average company contribution equates to 4.6% of a worker's pay, according to Vanguard.

But what if that match just disappears?

That's a reality some employees are facing these days. Recently, Sherwin-Williams (SHW), the prominent Ohio-based paint manufacturer, announced it was suspending its 401(k) match, which amounted up to a 6% company contribution, according to a report by Cleveland.com.

The company, which didn't respond to MarketWatch's request for comment, blamed the move on a variety of economic factors, according to the report. Among them: weak housing demand and the inflationary environment of recent years, to say nothing of President Donald Trump's tariff policies.

Sherwin-Williams isn't alone in this regard. Other companies have made similar calls to suspend their 401(k) match, especially during turbulent financial times, such as the pandemic or the 2008-'09 financial crisis.

Earlier this year, Werner Enterprises (WERN), a trucking company, also announced it was suspending its 401(k) match as part of a $40 million cost-savings initiative.

"Werner is taking intentional steps to streamline operations and position the company for long-term growth. This includes difficult but necessary organizational changes," the company said in a statement.

None of this may be reassuring to employees who are caught off guard by such match suspensions. "A lot of people just expect that to continue," said Karen Friedman, executive director of the Pension Rights Center, a non-profit organization that promotes retirement security for American workers.

Those company matches can add up over time and become critical to building a proper retirement nest egg. And that's on top of the fact they serve as an important incentive to get employees to contribute to their 401(k) plans in the first place, Friedman said.

But according to legal experts, it's generally in a company's purview to make changes to a 401(k) plan at its discretion.

Joy Napier-Joyce, a Baltimore-based attorney who focuses especially on employer benefits, told MarketWatch there's no rule that says a company has to offer a 401(k) program at all. But if it does, "they reserve the right to amend and change the terms and even eliminate the plan."

If employees are unionized, that affects things to a certain extent, Napier-Joyce added. Meaning that any match suspension or other changes to a 401(k) plan are typically subject to contractual bargaining.

Another wrinkle, according to Lisa Cummings, a Dallas-based attorney who works with businesses on their retirement programs: If the 401(k) is what's known as a safe-harbor plan, which means it's exempt from certain tax rules that employers have to follow in return for providing a match, then there's a requirement the company give employees at least a 30-day notice about any plan changes.

Still, companies can seek the changes in any case. And they often do when money is tight, Cummings said.

Retirement benefits are often the first things to be cut "when costs rise due to economic shifts," she said.

The question, Cummings added, is whether the 401(k) match suspension will become a broader trend in today's workplace environment. "Employers typically do not take this drastic step unless faced with very difficult economic circumstances," she said.

On social-media outlets, employees naturally voice frustration with any 401(k) suspension, saying it effectively amounts to a pay cut. And some indicate it can be a harbinger of worse things to come.

"My old company did this in [a] 2022 downturn, and they never reintroduced the 401k match. There were also...waves of layoffs that occurred after," said one commenter on a Reddit thread.

Others may also naturally question if the company is trimming executive compensation when it's cutting retirement benefits. In the case of Werner Enterprises, the company noted that its "executive leadership team took significant reductions to their compensation packages prior to the 401k decision being made."

If there's any hopeful news for those employees who see their 401(k) company match suspended, it's that such changes aren't necessarily permanent. Many companies that suspended matches during the pandemic restored them, for example.

At the same time, workers could be feeling the pinch in other ways when it comes to their benefits. Healthcare expenses are rising for employers at an unprecedented rate, according to a new study from Mercer, a consulting firm. In 2026, costs are expected to increase by 6.5% per employee, the highest jump since 2010.

Employees are likely to bear some of that burden, the Mercer report said. Think higher deductibles and other increased costs.

Some warn that when employers make changes to benefits, they run the risk of prompting workers to look elsewhere for jobs.

At the very least, suspending the 401(k) match can affect how workers view their employer, Cummings said. And it doesn't bode well for the employees' financial future, either.

"Removing the employer match undermines both retirement readiness and workforce morale," she said.

-Charles Passy

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09-20-25 0940ET