Wells Fargo abandons plans to cut 401(k) match for high earners

The roller coaster ride continues for Wells Fargo & Co. as the company wrapped up a volatile week by telling employees on Friday it is reversing a midweek decision to cut 401(k) plan matching contributions for high earners.

The memo to employees, including nearly 13,000 financial advisers, seemingly quashed an announcement from Wednesday that explained Wells Fargo’s revamped benefits program would mean the elimination of the matching retirement plan contribution of up to 6% of salary for employees who make more than $250,000 annually.

The Friday memo, obtained by InvestmentNews, states: “We’ve recently announced a number of changes to our health care benefits and 401(k) plan employer contributions U.S. employees.”

“After additional review and consideration, we’ve made the decision to continue the company’s 6% matching contribution for all 401(k) plan-eligible employees, with no compensation limit applied to eligibility. We believe this is the right thing to do.”

Other benefit changes remain in place and take effect in January, including switching the quarterly retirement saving matching payments to year-end from quarterly payments. Waiting until the end of the year to make matching contributions is not unique to Wells Fargo, but it is a policy less favorable to retirement savers.

In addition to impeding the ability to dollar-cost average, the year-end match also means any employee who leaves the company before the distribution will likely lose out.

The dueling internal memos coincided with reports that Wells Fargo is looking for a buyer for its $607 billion asset management unit, which could fetch more than $3 billion and help shore up the balance sheet for the fiscally hamstrung financial conglomerate.

The potential sale of the asset management unit comes just a week after Wells Fargo announced in its earnings report that its adviser count had fallen by more than 800 over the past 12 months.

“While this change represents retirements and some natural adviser attrition, it also includes the displacement of a sizable group of salary and bonus advisers as a result of the company’s work to become as efficient as we can,” wrote spokesperson Shea Leordeanu in an email at the time.

Compared to the second quarter, Wells Fargo reported 390 fewer advisers at the end of September.

Leordeanu did not respond to a request for comment for this story beyond sending a copy of the Friday memo.

— Bruce Kelly contributed to this report.