Big Blue retirement plan changes has workers seeing red
Big Blue's change to their 401(k) retirement plans has some IBM employees seeing red.
IBM sent staff a notice this week that in 2013 it will cease paying into their 401(k) plans semi-monthly with every paycheck. Instead, the matching discretionary contributions will be made just once at the end of the year.
While that on its own has a pro-union group organizing a petition of
protest, IBM added the rule that workers must be employed on Dec. 15 to
get the annual 401(k)matching payment.
That means, a employee laid off in November 2013 would not get their annual 401k payment from IBM.
"The problem is, that as everyone knows, IBM has job cuts all year long," says Lee Conrad, spokesman for the Alliance@IBM. "We're asking IBM to reverse this decision, because it financially compromises all IBM employees, even the ones who are not laid off."
For its part, IBM is saying that its 401(k) plans are still better than most companies and this change is necessary keep up with the increasingly stiff competition in the technology industry.
"IBM’s 401k plans remain among the best in the industry – and the
country," stated the company in a response release by spokesman Doug
Shelton. "This change reflects our continuing commitment to invest in
our employee 401(k) plans while maintaining business competitiveness in a
challenging economic environment."
The plan, which is considered generous by most companies, gives employees hired prior to 2005 get a dollar-for-dollar match up to six percent of eligible pay. People hired since then get up to a 5 percent match.
If the employee is eligible, IBM will make automatic contributions to their plan, even if the employee doesn't participate. The amount of automatic contribution earned depends on the pension plan that an employee qualified as of December 2007.
No matter how generous the plan, this is not not positive change for employees who have counted on those semi-monthly payments throughout the year, says Conrad.
"This is IBM is just hanging onto the money as long as they can," he says.
The Alliance@IBM, which is pro-union group, expects to soon have a petition ready for employees and their families to sign. It is hard to say how much interest that will attract given IBM e
mployees' well known
reluctance to publicly defy the company for fear of losing their jobs.
It is hard to say how this change could impact IBM's Rochester campus and its unknown number of employees. For many years, IBM has declined to say how many people it employs here or elsewhere. The last official IBM tally of its workers in Rochester was 4,200 way back at the end of 2008. There have been many layoffs euphemistically called "resource actions" by the technology giant.
While IBM is commonly believed to be Rochester's second-largest employer behind Mayo Clinic, there is no evidence to prove that is still true.
IBM sent staff a notice this week that in 2013 it will cease paying into their 401(k) plans semi-monthly with every paycheck. Instead, the matching discretionary contributions will be made just once at the end of the year.
That means, a employee laid off in November 2013 would not get their annual 401k payment from IBM.
"The problem is, that as everyone knows, IBM has job cuts all year long," says Lee Conrad, spokesman for the Alliance@IBM. "We're asking IBM to reverse this decision, because it financially compromises all IBM employees, even the ones who are not laid off."
For its part, IBM is saying that its 401(k) plans are still better than most companies and this change is necessary keep up with the increasingly stiff competition in the technology industry.
The plan, which is considered generous by most companies, gives employees hired prior to 2005 get a dollar-for-dollar match up to six percent of eligible pay. People hired since then get up to a 5 percent match.
If the employee is eligible, IBM will make automatic contributions to their plan, even if the employee doesn't participate. The amount of automatic contribution earned depends on the pension plan that an employee qualified as of December 2007.
No matter how generous the plan, this is not not positive change for employees who have counted on those semi-monthly payments throughout the year, says Conrad.
"This is IBM is just hanging onto the money as long as they can," he says.
The Alliance@IBM, which is pro-union group, expects to soon have a petition ready for employees and their families to sign. It is hard to say how much interest that will attract given IBM e
It is hard to say how this change could impact IBM's Rochester campus and its unknown number of employees. For many years, IBM has declined to say how many people it employs here or elsewhere. The last official IBM tally of its workers in Rochester was 4,200 way back at the end of 2008. There have been many layoffs euphemistically called "resource actions" by the technology giant.
While IBM is commonly believed to be Rochester's second-largest employer behind Mayo Clinic, there is no evidence to prove that is still true.
Wow...I wonder what is next?
Posted by: lando | December 07, 2012 at 10:12 AM
Another reason to have lay-offs of older employees by the end of the year!!!
Posted by: deb | December 19, 2012 at 03:41 PM