BENTONVILLW, Ark. - Wal-Mart Stores Inc., the largest U.S. private employer, plans to end profit-sharing contributions in February, replacing them with matches to employee 401(k) retirement plans to bring down benefits costs.
The retailer will match contributions up to 6 percent of eligible employees' pay, according to a memo obtained by Bloomberg News. Previously, Wal-Mart automatically put up to 4 percent of pay into the profit-sharing plan, spokesman David Tovar said.
Since taking over in 2009, Chief Executive Officer Mike Duke has pledged to slow expense growth, aiming to counter five consecutive quarters of sales declines at U.S. stores open at least a year.
The switch by Wal-Mart, which has about 1.4 million U.S. employees, only will benefit those who are in the plans, so staff will need to join to profit from the move, retirement consultant Byron Beebe said.
Mr. Tovar wouldn't disclose what percentage of Wal-Mart's 1.1 million eligible employees contribute to the 401(k) plan, which is administered by Merrill Lynch & Co.