Wal-Mart ends profit sharing with employees

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Wal-Mart ends profit sharing with employees

By ANNE D'INNOCENZIO, AP Retail Writer Anne D'innocenzio, Ap Retail Writer – 48

mins ago

NEW YORK – Wal-Mart Stores Inc., the nation's largest private employer, plans to

end automatic profit-sharing contributions for its employees in a revamp of its

benefits package that it says will give workers more chance to share in its

financial success.

The discounter will replace profit-sharing starting in February with retirement

plan contributions of up to 6 percent of pay — as long as workers sign up and

contribute an equal amount, Wal-Mart said in a memo it provided The Associated

Press late Friday.

The payments added up to 4 percent to the compensation of employees who'd worked

more than 13 months for the world's largest retailer.

Wal-Mart also is setting aside up to $1,000 for each employee's health care

account to cover eligible medical expenses before employees have to pay any

deductible coinsurance.

The memo also notes that employees have the " potential " to receive larger

bonuses if the store, warehouse club or distribution center where they work

performs well.

Wal-Mart started profit sharing in 1971. It has 1.4 million employees in the

U.S. and annual revenue worldwide of about $400 billion, most from its U.S.

stores.

Wal-Mart spokesman Dave r said the new matching retirement contributions

will " help associates grow their retirement savings much faster than before. "

" Based on feedback from associates, we redesigned our plans to make them more

contemporary, relevant and in line with what most companies already do, " he

added.

But Stapleton, assistant director at the union-backed advocacy group

WakeUpWalmart, saw eliminating profit-sharing as a cut in compensation.

" To demand that people who already make poverty-level wages begin to pay in

order to receive any retirement benefits is out of touch with the reality of

associates' lives, " Stapleton said in a statement e-mailed to The AP.