Employer Stopped Its 401(k) Match. What Do I Do Now?

My company told me it will no longer match a portion of my 401(k) contributions starting next year. It had been contributing 3% of my salary. Should I begin looking for a new employer that offers a match or should I stay where I am? -- Mark, Silver Spring, Md.

You're smart to at least entertain the idea of getting a new job. After all, matching contributions are a form of compensation. So by eliminating its 401(k) match, your employer has effectively cut your pay.

For example, if you pull down $50,000 a year in salary and your company kicks in 3% of that amount to your 401(k) account, you're essentially earning $51,500 a year ($50,000 plus a 3%, or $1,500, match). By doing away with the match, your employer has reduced your compensation from $51,500 to $50,000, a 2.9% hit.

But losing the match doesn't necessarily mean you should jump ship. When you're evaluating a job, you need to take a very broad view. You want to consider not just your salary and 401(k), but your entire compensation package, which includes any other retirement benefits, health and life insurance and other monetary perks (stock options and the like).

You also have to factor in non-financial aspects of the job: vacation time, how your employer treats you and your fellow workers and the satisfaction you derive from your job. And, of course, you don't want to forget about the opportunity for advancement.

In short, you need to assess the whole enchilada and then decide whether, on balance, you're better off staying or taking a job with a new employer.

That said, the timing of your company's move strikes me as a bit unusual. Many companies cut or suspended matching funds to save money during the financial crisis. But the trend lately has been for employers to reinstate matches, not get rid of them.

Indeed, when Charles Schwab recently surveyed companies that offer 401(k) plans it oversees, it found that the percentage of plans providing matching funds was on the rise, climbing to 73% last year after dropping to 67% in 2009.

Ideally, you'd like to find out why your company is going against the grain -- and whether it envisions this move as temporary or permanent.

If jettisoning the match is a response to financial difficulties that could lead to layoffs or less robust salary increases down the road, that's something you'd want to factor into your decision.

Getting a definitive answer on this may be difficult. But if your company is large enough to have a public profile, plugging its ticker symbol into the Search box at the top of this page will give you access to the latest news and financial information about the company. If you work for a company that's too small to have a public profile, some discreet inquiries among fellow employees might shed some light.

You'll also want to take current conditions in the job market into account in deciding to stay put or leave. Although things have been improving lately, the recovery in the job market is still tenuous and the economy overall remains somewhat fragile. So you have to weigh whether you would be better off embarking on a job search now or waiting until the economy and job market begin humming again.

Related: How much should I save if I want to retire early?

While you're mulling these issues, you should also address a more immediate concern: how to prevent the loss of matching funds from undermining your retirement prospects.

You can do that by boosting your own 401(k) contributions. If you're already socking away the maximum 401(k) contribrution allowed by the federal government for your plan, you can always pick up the slack by doing an IRA or even throwing some extra bucks into tax-efficient index funds, ETFs or tax-managed funds in a taxable account.

Granted, kicking in more out of your own pocket could force you to make unwanted cutbacks in your spending. But to the extent you're funneling this extra savings into a regular 401(k) account or a tax-deductible IRA, you can at least take comfort in knowing that you're also trimming your tax bill.

So by all means start scouting out other job possibilities. Who knows? Even in these uncertain times you may find a new position that's attractive enough to warrant a switch. As you're doing that, though, scour your budget for ways to set aside an additional 3% of salary. That way your current pay cut won't also translate to a cut in your retirement income down the road.