Sherwin-Williams has suspended 401(k) matches—is it still worth it to contribute?
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This year, my daughter joined millions of other workers when she enrolled in her employer’s 401(k) plan. These days, that employee benefit is routinely expected—the opportunity to pay into a future retirement account is nearly automatic, and the added perk of an employer match just sweetens the pot.
But what if your employer doesn’t offer a match? Or worse, what if you took a job counting on a match and then your employer suddenly announced that it would no longer contribute a match to your 401(k) plan?
Sherwin-Williams Presses Pause On 401(k) Plans
That’s exactly what happened to workers at Sherwin-Williams, a paints and coatings company based in Cleveland, Ohio. The company, which boasts just under 50,000 workers nationwide, announced plans to temporarily suspend its 401(k) match. According to Cleveland.com, which first reported the move, the company cited several factors, including high mortgage rates that have pushed housing demand to near-historic lows and inflation that has reduced DIY demand for three consecutive years. The company also pointed a finger at tariff policies and increased costs.
Under its current plan, Sherwin-Williams matches 100% of the first 6% of eligible employee contributions. That’s above the reported national average of 4.6%. (Before the announcement, Forbes named Sherwin-Williams to several “best” lists in 2025, including America’s Best Employers For Company Culture.)
As of October 1, those contributions will cease. The stop is being characterized as a pause—the company made similar moves during the 2009 financial crisis and the 2020 COVID pandemic. How long the pause could last is anyone’s guess. And it’s unclear whether Sherwin-Williams will make cuts to other employee programs or benefits, including those tied to executive compensation. The company didn’t respond to a request for comment.
Since the early September announcement, the company’s stock has largely continued to decline, hitting a low of $340.10 on September 25, 2025. According to Barron’s, this is the company’s longest losing streak since January 25, 1999, when it fell for 13 consecutive sessions.
While employees might be unhappy about the change, it’s not illegal. Companies are allowed to make changes to 401(k) plans, including the amount of matches—and whether to offer a match at all. Depending on the kind of plan, companies may not even need to provide notice. And, businesses can even opt to axe their programs altogether.
What Should Employees Know About 401(k) Plans?
Tony Kure, a Cleveland-based senior portfolio manager & managing director at Johnson Investment Counsel with over 20 years of financial services experience, encourages employees to take advantage of matching opportunities, calling them “a very attractive benefit.” However, he warns that employees should be mindful of how the plans work—and whether there might be any limitations.
He notes that the matching provision is discretionary, and the company is not obligated to provide the benefit. And, under some plans, the match may not even be in cash. Companies sometimes fund the match amount in company stock, he says, which could lead to overexposure to a single stock in the employee’s portfolio.
There may also be limits on matching funds. For example, companies may have vesting periods that require employees to remain with the company for a specified period of time before they have access to the funds.
“Every plan is different,” Kure explains, “and it’s important the employee does not assume provisions that may or may not be part of their plan.”
401(k) Plans Background
Before the 1970s, there wasn’t any such thing as a 401(k) plan. As employee benefits plans, including funding for retirement, began to change, some in D.C. worried about what that might mean for employees. In 1974, Congress passed the Employee Retirement Income Security Act—referred to as ERISA—which provided guidelines and oversight for certain kinds of benefits plans.
Eventually, that led to the creation of Internal Revenue Code Section 401(k) as part of the Revenue Act of 1978. The new code section allowed employees to opt for some of their income to be paid—and taxed—later as deferred compensation. IRS Regulations followed in 1981 and made clear that employers could make contributions—those matches—to employee plans. Within a year, many large employers in the U.S. offered 401(k) plans to their workers, with an employer match as an extra perk.
Today, many employees choose to do most of their retirement savings through a 401(k) or similar workplace-based retirement plan. Many have the option of making their contributions to a traditional or Roth 401(k) plan. The Roth 401(k) plan was introduced in 2006 and allows employees to pay the tax on their contributions upfront. The downside is that there’s no tax break for the contribution itself, but the upside is that there’s no tax payable on withdrawals after you reach age 59 and a half or older (some other restrictions apply).
Tax Benefits Of Retirement Plans
Many of us immediately think of an IRA when we think about retirement. With a traditional IRA, you make potentially tax-deductible contributions. Any earnings, including interest and gains, aren’t taxed until you withdraw from the account once you retire. If you opt for a Roth IRA, contributions are not tax-deductible and are funded with after-tax dollars, but the payoff is that future withdrawals are tax-free.
Your employer may offer a defined contribution plan like a 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan. With an employer-sponsored retirement account, you can kick in a portion of your paycheck toward retirement savings (typically, pre-tax contributions), and your employer may offer a matching contribution. There may also be a Roth option for these accounts—as with a Roth IRA, with a Roth 401(k) or similar plan, in exchange for paying taxes upfront, the contributions and earnings can be withdrawn tax-free in retirement.
From a tax standpoint, the benefit of traditional (non-Roth) retirement accounts is generally two-fold: earnings don’t count towards your current year income—which reduces your potential tax bill—and it grows tax-deferred. When you reach retirement age, withdrawals are taxable as you take the money out—certain exceptions may apply.
(You can find the contribution limits, including catch-ups, for pension plans and other retirement-related items for tax year 2025 here, and you can find the projections for tax year 2026 here.)
Action Items For Employees
So what should employees do now? Kure encourages employees to review their plans—contributions shouldn’t be forgotten about once made. For example, if your company matches contributions with company stock, employees should understand the vesting and trading restrictions associated with these contributions. If possible, Kure advises that employees should revisit their exposure to the single stock to avoid overexposing themselves to the risk associated with it—there can be such a thing as too much of a good thing.
You should also familiarize yourself with the rules, Kure says. For example, as of 2026, high earners (defined as those earning at least $145,000) who are over 50 years old will be required to have matching provisions made in after-tax Roth 401(k) accounts instead of the tax-deferred 401(k) accounts typically used by high earners.
At least annually, Kure suggests that employees review their 401(k) investment allocations and rebalance them to their target asset allocation—meaning that it should make sense for your stage in life and risk appetite. Additionally, he says that employees should consider integrating investment accounts outside of their 401(k) plans to ensure a top-down asset allocation is suitable for their specific circumstances—in other words, make sure that your 401(k) plan isn’t an outlier in your overall investment strategy.
Additionally, employees should consider accounts outside of retirement plans, such as health savings accounts (HSAs), that may be available to them. Employees who are not phased out due to income restrictions can contribute to IRAs or Roth IRAs as separate retirement vehicles from company plans. Plus, some companies offer other opportunities to save, including employee stock purchase plans (ESPPs), discounted group life insurance, and incentive stock options.
Should Employees Worry?
Sherwin-Williams is not the only company making these kinds of decisions. In May of this year, Werner Enterprises, a trucking company, announced that it would suspend its 401(k) matching program for employees. Like Sherwin-Williams, the company expects the pause to be temporary.
Employees should brace themselves for the possibility that other companies could follow. “It is entirely likely this could happen at other companies,” Kure says, “if a broader economic slowdown or a recession were to come to pass.”
And while employee match reductions aren’t desirable, Kure suggests it is better than the alternative, which would have been reducing headcount. “Given the time, effort, and expense involved with reducing the workforce and then having to re-hire when the business improves, reducing the 401(k) matching amount is a much simpler way to quickly reduce costs, which can quickly be reversed,” he explains.
That doesn’t mean that employees should be cavalier about these kinds of announcements. If conditions at your company deteriorate, you should certainly be concerned about employment prospects. It’s always a good idea, Kure says, to keep skills up to date and valuable—just in case.
