In case your company matches your retirement funds, that payment most likely turns up in your pay stub almost every other week approximately. Now IBM informed employees it’s altering its 401(k) match. The organization can make one lump-sum payment each year. What’s the main difference? Potentially, lots of money.
Nancy Hwa using the Pension Privileges Center continues to be keeping lists of firms that have frozen their pension plans or cut their 401(k) matches. When she learned about IBM’s latest move?
“My first thought was, can i need to start another list?” she states. “It appears like it’s yet another part of this trend of companies leaving helping their employees…save for retirement.”
Here’s one of the ways employees are in position to lose. When they leave the organization before December 15, they won’t have that year’s contribution, unless of course they retire. That may add up to several 1000′s of dollars lost.
Like a lot of companies inside a lagging economy, IBM is pressurized to chop costs, states Alison Borland, v . p . of retirement solutions and methods at benefits talking to firm Aon Hewitt.
“This is a method to get it done without considerably affecting individuals employees who stick to the organization for that twelve month,” she states.
Even individuals employees could still have a hit. The match money will not be employed by them all year round. It’ll work for IBM.
“So any gains available on the market out of this investment money won’t be anything within my benefit,” states Earl Mongeon, an IBM worker for 34 years.
Mongeon, a senior process operator in Burlington, Vermont, states the 401(k) change is yet another blow to employees. 4 years ago, IBM froze its traditional pension benefits. The organization has cut 1000′s of jobs recently.
Aon Hewitt’s Alison Borland states no more than 9 % of companies pay their 401(k) matches in the finish of the season, but she states more may follow IBM’s lead to save cash.