Starting next year, IBM's contributions, which generally range from 6% to 10% of pay, will take place Dec. 31. Workers who leave the company before Dec. 15 won't qualify for the match, unless they retire.
IBM's switch is the latest in a series of moves big companies have been making to rein in retirement-plan expenses in recent yearsand the financial implications for employees could be significant.
For IBM, the latest move could help save millions of dollars a year in compensation expenses, and keep valued workers who want to ensure they receive the match more tethered to their jobsat least until the end of a given year.
(snip)
In 2011, it paid $875 million in matching and automatic contributions.
The change "reflects our continuing commitment to invest in our employee 401(k) plans while maintaining business competitiveness in a challenging economic environment," IBM spokesman Douglas Shelton said in a statement.
Financial planners say the lump-sum contributions undermine one big advantage of 401(k) plans: "dollar-cost averaging," in which investors are buying stock and bonds at multiple prices over time, leveling out risk and return. It is a particular concern for older workers who are closer to retirement and have less time to make up for short-term losses, said Jason Chepenik, a certified financial planner and retirement-plan consultant in Winter Park, Fla.
Some IBM employees are unhappy.
"It's a huge change," said Andy Maher, a 59-year-old IBM customer engineer in Victorville, Calif. Mr. Maher, who started at the company in 1976, was an early adopter in the company's retirement offerings, eventually increasing his savings to 12% of pretax pay while raising five children.
Now, he said, he is concerned that "you lose a whole year's worth of interest on that money. And if they lay you off Dec. 1, you don't get anything. It adds a whole other level of unnecessary uncertainty."
I hope that trend doesn't continue, it's a cost reduction moved squarely hitting the workers in the pocketbook.
http://online.wsj.com/article/SB10001424127887323316804578163722900112526.html
I hope this is not something that become more common place. Maybe IBM is a more loyal employer but I can see a lot of future discussions about 'making sure to do the layoffs before Dec 1 so we don't have to pay the match into their 401(k)'. I also think its interesting that they moved to an annual contribution instead of a vesting scheme.
401k is a crock in the first place. A devised plan to transfer a companies loss to the employee. Market goes south, guess who gets hit.
Anything long term profit that depends on the market is nothing more than wishful gambling.
Even old Al Capone preferred to deal in bootlegged spirits rather than play the stock market scam. Something he knew was rigged from the start. Something a mob criminal like himself knew he had no chance at winning in the end.
Most retirement plans heavily rely on the 401k, plus SS benefits.
Wonder why so many politicians want to gut SS while preferring the stock market sourced 401k? Business. Wall street. You know... those that own and operate your senator and congress persons.
Well... You'll find out why, the hard way, come one day.
The 401k looks great on paper. So does that lotto ticket jackpot figure.
401k plans were devised to scam the employees retirement funds.
Replacing the guarantees of life pensions, as well as company pensions protected by the unions. Granting the employee a fair and honest stake in that companies profits.
Walmart, the perfect example.
The company rakes in multi-billions while the employee reaps nothing on their part other than a poverty wage.
People are fools. They let this happen. Over and over. Every single day. It's probably going on in your state right now. Or already has. Or soon will be.
As someone who used to work for IBM.
BAHAHAHAHAAHAHAHAHAHAHAH
I hope that trend doesn't continue, it's a cost reduction moved squarely hitting the workers in the pocketbook.
IBM is notorious for treating their workers like dogsh*t.
401k is a crock in the first place. A devised plan to transfer a companies loss to the employee. Market goes south, guess who gets hit.
Anything long term profit that depends on the market is nothing more than wishful gambling.
Even old Al Capone preferred to deal in bootlegged spirits rather than play the stock market scam. Something he knew was rigged from the start. Something a mob criminal like himself knew he had no chance at winning in the end.
Most retirement plans heavily rely on the 401k, plus SS benefits.
Wonder why so many politicians want to gut SS while preferring the stock market sourced 401k? Business. Wall street. You know... those that own and operate your senator and congress persons.
Well... You'll find out why, the hard way, come one day.
The 401k looks great on paper. So does that lotto ticket jackpot figure.
401k plans were devised to scam the employees retirement funds.
Replacing the guarantees of life pensions, as well as company pensions protected by the unions. Granting the employee a fair and honest stake in that companies profits.
Walmart, the perfect example.
The company rakes in multi-billions while the employee reaps nothing on their part other than a poverty wage.
People are fools. They let this happen. Over and over. Every single day. It's probably going on in your state right now. Or already has. Or soon will be.
I smell future lawsuits and everyone who decides to quit IBM leaving in January.
They are? I've never heard that, and they're on several different "top employer" or "ideal employer" lists.....
For example: http://www.universumglobal.com/IDEAL-Employer-Rankings/The-National-Editions/American-Student-Survey
If they're so horrible, what prevents the workers from going to some other place that's not as horrible?
The came in 45th per your link. Thats not saying much when you see how big they are.
I know several people that work/worked for IBM. Very few had anything good to say.
They are? I've never heard that, and they're on several different "top employer" or "ideal employer" lists.....
For example: http://www.universumglobal.com/IDEAL-Employer-Rankings/The-National-Editions/American-Student-Survey
If they're so horrible, what prevents the workers from going to some other place that's not as horrible?