Trader Joe Cuts Workers’ Retirement Benefits During Pandemic –

Trader Joe’s employees discovered in January that retirement benefits are split for many employees. The announcement was made on the second page of the company’s internal bulletin, The Bulletin, after explaining No. 1 of the company: “Integrity”.

“The definition of good faith is simple … it means you treat others the way you want them to treat you,” the bulletin explains.

The change to the company’s 401 (k) plan is not described as a reduction, but retired experienced workers know that it is. Employees are accustomed to receiving a one -time annual contribution from the company, equal to 10% of their previous salary. But those with less than a decade of service at Trader Jos will only receive 5% for work done in 2021, the bulletin said. Deputy managers will receive 7% at the same time, while all store managers will receive 10%.

Workers with 10 years of employment can maintain an annual contribution of 10% per annum, but this provision follows the problem. They must work at least 700 hours each of these people to receive the maximum deposit. So long -term workers will only get 5% if they took extended leave years ago or if they temporarily reduced their working hours, possibly to address personal or health problems.

The bulletin mentions this is a “discretionary” contribution and not a contractual guarantee, and for years the company has offered the same warning to its crew guidance that Trader Joe’s language is for employee. But according to four employees who spoke to HuffPost, employees were blinded to small contributions, especially those who worked nearly two years in a pandemic, responding to COVID-19, product shortages, and angry consumers.

“It’s really creepy for a lot of the crew,” said Maege Joseph, a Massachusetts businessman who worked for Joe.. “I think it’s trendy. The company seems to be moving from where you can have a career, support your family, and feel relatively safe working in the food industry. “

Merchant Joe’s did not respond to numerous HuffPost emails and phone calls seeking details about the company’s retirement plan.

But early copies of the crew manual indicated an average annual contribution of 10%. (In one version, included as a 2016 Court Show. The company said everyone would receive 10%, except for workers under 30, who would receive 5%. That Trader Joe could “make discretionary contribution. “

Approximately 62% of workers are in the private sector. According to the Bureau of Labor Statistics, they can get 401 (k) style defined contribution pension plans through their work. Many employers include these plans in proportion to employee contributions, up to a certain portion of the employee’s salary, usually between 3 and 6 percent.

Merchant Joe’s previous contribution, which was worth 10% of workers ’wages for the year, looks high for a nonprofit grocery store. And unlike related schemes, workers receive corporate contributions, regardless of whether they have invested their money or not.

But splitting the contribution means a substantial reduction in total salary, which could possibly be in the thousands of dollars, depending on the employee’s salary and scheduled hours. Changes in an employee’s retirement savings over time can be significant, especially considering tax-deferred investment returns. It’s unclear if Trader Joe will be able to return the highest contribution for 2022 or beyond.

Employees said the change not only angered employees, it also boosted negotiations with a union outside Massachusetts.

“Reduce people’s pensions during a pandemic? What does this “good faith” look like? “A store employee in Pennsylvania said he, like others, spoke on condition of anonymity for fear of retaliation.” I have planned to be here for my entire career, I was very happy. “But they’re just holding back.”

None of the Trader Joe’s stores currently have union representation. The campaign in Massachusetts is called Merchant Joe’s United, It is independently managed and, according to Joseph, is already interested from other stores. Collective bargaining is prevalent in a wide range of industries, with United Food and Commercial Workers representing More than 800,000 food workers, including major networks owned by Kroger, Albertsons and other companies.

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Another Trader Joe employee said the union’s past efforts have never gained much traction in the chain, with the consensus that “Trader Joe is good enough for their employees.” But the worker said longtime crews are worried about 401 (k) changes, as well as rising wage levels, that won’t translate into a significant salary increase for more experienced workers.

“When you start to see that something like a back door is actually happening, you get angry and start thinking,‘ Well, other grocery stores are joining, ’” they explain.

The employee said he knew two employees who thought they were entitled to a 10% contribution for 2021 because of their position, but they found out they were receiving 5% because at one point they didn’t have enough time. They say the collective bargaining agreement will avoid such surprises.

“If you have a contract, they won’t do anything,” the worker said.

It would be wise for an employer to reduce 401 (k) benefits rather than wages to save money, as some workers are more likely to notice or care, especially for young people where retirement is an abstraction. that far. Many grocery store employees can’t make regular payments on their own, they may be unlikely to pay attention to the plan.

According to company guidelines, Trader Joe gradually pays the employer’s contributions over time, so workers are not fully eligible to receive the amount the company has put into the plan until they can work there within. of six years. Workers who first leave Trader Joe’s will leave a percentage of the company’s contributions. A schedule for such assignments is common in employer retirement plans.

One of the merchants, Joe Veteran, said he only thinks of the job as a transition job and he doesn’t expect to work at a grocery store for more than a year or two. But eventually a few years passed and he relied on his retirement plan more than he expected. He was worried to see Merchant Joe’s contribution reduced.

He said those who thought the plan was generous from the beginning were losing their minds.

“No one gives us anything; “We’re working towards it,” he said. “We should not praise Trader Joe for getting the minimum wage. We just live in an area where we are normalized, we are not yet earning enough money to save and the idea that because you work in the retail trade, you do not deserve a normal life.