It's obvious: Companies are trying to survive. Doing more with less is becoming the motto - often translating to cuts in pay, perks and benefits. One of those cuts is matching contributions to the company's 401(k) plan.

The danger here is that employers may be sending a message to employees that helps rationalize cutting workers' own deferrals into the plan. Further, there are other questions for employers to consider: Will employees quit? Will they complain at the water cooler, thus dampening morale and productivity? Will the move increase financial anxiety, particularly among baby boomers that are in shock at their overall loss of net worth and retirement savings?

Companies that emphasize open communication will be more likely to answer no to those questions. On the other hand, companies that share little to no information with employees may not even know these questions exist and may suffer attrition and lack of productivity brought on by personal financial panic.

One of my clients is a company with approximately 1,000 employees, many of whom are lower income. The CEO and members of the retirement plan committee decided to amend the company's plan from a fixed, per payday match into a discretionary match that features two parts: One is a per payday match, and the other is a supplemental discretionary match based on the success of the company that will be made at the end of the year. The committee intends to create corporate criteria for both the payday match and the supplemental match that it will communicate to employees. The company also has plans to ramp up financial education programs for employees.

This company is giving the employees hope of a better tomorrow and has implemented a corporate strategy to back it up.

It is important for all employers to determine the role their 401(k) plans play in their companies financially and culturally. With the purpose in mind, the decisions they make on their matching contributions currently and when the crisis cures will become clearer.

Here are some practical questions and thoughts that plan sponsors may consider with their advisers:

>> Is the company in a survival mode?

If yes, focus on survival. Cut more expenses and modify, suspend or eliminate the matching contributions. The new proposed regulations upon which employers may currently rely allow them to even exit safe-harbor matching and nonelective contributions if they have a substantial business hardship from operating at an economic loss or if there is substantial underemployment in their business and sales and profits in their industry are declining or depressed.

Explain to your employees what you are doing and why you are doing it (beyond the legal requirement to do so) and your intentions once you get out of crisis mode.

>> Have participants changed their deferral habits since a year ago?

If yes, was the rate of deferral up or down? We have seen a growing number of employees that have not only continued at the same rate, but some that have actually increased their rate of savings. Study the demographics of which age and compensation groups did what. This will tell you how important the plan is to your employees.

>> When business surviving turns back to thriving, should the plan design be re-examined?

Plan committees tend to focus more on investment options than the design of the plan. If this economic environment has taught us anything, it is the lesson of being adaptive. Most plan designs could stand a second look based on how the business has changed coming out of this recession and how the new laws offer more opportunities. Consider making matching contributions more flexible and better communicated to employees.

Virtually all 401(k) plans that are on prototype or volume submitter documents will have to re re-stated, due to the new IRS procedures, by April 30, 2010, so it may be a good time to think differently about matching contributions and other plan provisions and make changes now so that they can be reflected in a brand new summary plan description.