As businesses look for ways to cut costs in the current economic slump, some are conserving cash by eliminating the company's matching contributions to workers' 401(k) accounts.  These employer matches have been a popular employee benefit, with the employer typically contributing 50% of employees' contributions on up to 6% of their annual pay. 

Whether suspending matching contributions is a smart business decision depends on a number of factors.  Conserving cash may keep the business from having to lay off or cut employees.  Indeed, in today's troubled economy, it may be necessary for the business's very survival.  However, it's likely to affect worker morale at a time when workers are seeing steep declines in their own investment and retirement accounts.  Such cuts may make a company appear to be in more dire straits than it really is, a perception that is not good for any business when things are tight.

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