IBM will switch from matching employee contributions to their 401(k) plans twice a month to once a year
The move may set a precedent for companies looking for savings in employee benefits
IBM Draws Flak for Change to 401(k) Plan
By Sarah Frier – Dec 7, 2012 12:08 PM ET
International Business Machines Corp. (IBM), the largest computer-services provider, drew fire from a worker organization for a change to its 401(k) retirement plan that cuts the frequency of company contributions to once a year.
The company will switch from matching employee contributions to their 401(k) plans twice a month to every Dec. 15, a move that “shortchanges IBM employees,” Alliance@IBM said on its website. While the amount that employees receive isn’t changing, workers who leave or are fired before Dec. 15 won’t get their payment for the year.
IBM said the change was made to help keep the company competitive. The move may set a precedent for companies looking for savings in employee benefits, said Dan Kravitz, president of Kravitz Inc., which administers about 1,000 retirement plans.
“I wouldn’t be surprised if other employers started to look at this for their plan,” Kravitz said in an interview. “Requiring employees to stay through the end of the year to get a match would be pretty significant cost savings for such a large employer.”
https://www.bloomberg.com/news/2012-12-07/ibm-draws-flak-for-change-to-401-k-plan.html