NEW YORK (CNNMoney.com) -- Wal-Mart Stores, the largest private sector employer in the country, announced major changes to retirement, medical and profit-sharing benefits it offers its 1.4 million workers.
As part of the benefits overhaul, Wal-Mart is switching its 401(k) plan to a more "contemporary plan" that matches employee contributions. The company is also introducing new health plans to which Wal-Mart will contribute a maximum of $1,000 toward an employee's health care expenses.
The changes were conveyed to employees in a memo ahead of the company's annual open enrollment that kicks off this week.
With its previous retirement plan established in 1971, the company would share its profits with employees by automatically putting company money -- the equivalent of 4% of an employee's pay -- into a retirement plan. The employee wouldn't be required to contribute.
With the new plan, employees will have to contribute into the newly formed 401(k) plan beginning Feb. 1 2011. Wal-Mart will then match employee contributions up to a maximum of 6% of pay.
"If an associate contributes 6%, and the company matches it 6%, that's 12% of an associate's income that's in the plan for their future," said Wal-Mart spokesman David Tovar.
Regarding their health plan next year, Tovar said the vast majority of employees will see cost increases of about $4 per pay period beginning next year.
Wal-Mart is introducing plans that offer Health Reimbursement Accounts (HRA) to which the company will contribute a maximum of $1,000 to pay for medical expenses before a deductible or coinsurance kicks in.
Lastly, Tovar said the company is retooling its bonus incentive program whereby hourly workers will have the potential to receive additional quarterly bonuses based on their store's performance.
"Many people are struggling with the economy," said Tovar. "With health care costs rising, we're trying to create plans for our associates that help them save for the future, give them more cash now and give them health plans that meet their needs."
Wells Fargo's board of directors is under fire ahead of Tuesday's annual shareholder meeting amid criticism the board failed to do enough to prevent the fake account scandal. More
Forget nursing. Dental hygienists earn more money, face less stress and have better work-life balance. CNNMoney profiles this new middle class job that's booming. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
The Canadian province of Ontario is set to give thousands of dollars to low-income residents to see if its improves their health and job prospects. More