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Walmart ends profit sharing in favor of matching contributions

Discussion in 'Economics and Financials' started by padre31, Oct 12, 2010.

  1. padre31

    padre31 Premium Member Luxury Box

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    http://finance.yahoo.com/news/WalMart-ends-profit-sharing-apf-3150722021.html?x=0

    Now imho, this is the sort of question the EcFo was designed to tackle, are the employees of Wally World better served with a passive profit sharing plan, or a more aggressive, and expensive for the employee matching contribution plan?

    Hmm, my dislike for Wally World admittedly colours my view on this one, but I can see both sides of it, profit sharing is a less expensive option for employees, but 6% being matched is a powerful investing tool.

    Basically if a employee makes 12k, their 6% or around 700 dollars becomes 1400 dollars that would be invested and earn a return that compounds over time.
     
  2. Jimmy James

    Jimmy James Ron Swanson

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    I don't understand the either or of this. Reduce profit sharing, and provide a match for some of the contributions.
     
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  3. padre31

    padre31 Premium Member Luxury Box

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    Well, profit sharing is a fixed expense, by switching to a matching plan Wally World is A) gaining access to "free" capital B) becoming more heavily invested in the financial community.

    1.4 million employees each contributing to the plan with little to no future defined benefits that have to be paid out, Wally World will have a inhouse investment powerhouse brewing.
     
  4. texasPHINSfan

    texasPHINSfan New Member

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    The reality is that it is not standard to even have profit sharing. Most companies don't even have matching. Mine doesn't, and we're an investment company.

    I think matching is more than fair in this economy; it's an employer's market. I'd like it if all those Walmartians could write my executives and hook me up with that deal. :lol:
     
  5. Zach13

    Zach13 Season Ticket Holder

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    Correct, most companies do not have either.

    I work for a company that does not offer either to the staff.
     
  6. Boik14

    Boik14 Admin Club Member Retired Administrator

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    Hmm, I work for a place that has both! Guess I like my job even more then I thought :)
     
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  7. texasPHINSfan

    texasPHINSfan New Member

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    Hook a brother up! :lol:
     
  8. Boik14

    Boik14 Admin Club Member Retired Administrator

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    Send me a resume. If you have sales experience and can deal with people I will do what I can....:wink2:
     
  9. Jimmy James

    Jimmy James Ron Swanson

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    My employer doesn't have profit to share with me, but we do have a modest match (I think it's I contribute $40 and they kick in $20 per pay period) to my 401k-equivalent.
     
  10. Zach13

    Zach13 Season Ticket Holder

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    That is modest, but I never look down on free money!
     
  11. Jimmy James

    Jimmy James Ron Swanson

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    Ditto, my friend. I like that the state actually opts people in for this at the level of $20 a pay period so they get at least the $10 match unless they take the effort to opt-out.

    I also think one of the benefits to it not being a 401k is that if I'm not mistaken I get to take the money with no tax penalty if I change jobs. I forget if that is for the match money (which is technically in a separate account) or for the money I contribute. I think it's for the match money. If I vest in it, I get to just take it upon changing jobs.

    Of course, I love my work and cannot imagine changing a thing!
     
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