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IBM Holds 401(K) Match

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    WSJ reporter Kelly Greene on IBM's 401(k) change.

  • Duration 3:33
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All right so IBM decides all the -- on -- -- 41 K until the end of the year makes one time payments to employees and at the end.

Of the year.

-- for the company allows big blue to hold -- the money longer save on administrative costs.

Maybe get some people out the door before they make the -- she and employee leaves early course -- that's the upside for the company.

Right in the disadvantage would then be for the employee also -- -- place because they can't dollar cost average.

Who's a year's worth of interest.

Kelly Greene wrote all about it she gets the credit and today's Wall Street Journal and she is -- this huge native and I guess.

What employees might be concerned about -- other big companies following -- yeah exactly even if you don't work for IBM if you're in a 401K plan.

And you have a company that's in the middle of a big huge cost cutting kind of push which many companies are right now.

This is something that a lot of companies are looking at doing you know we talked with benefits consultants -- said that this is frequently on their list of ideas for what companies can do.

It's not -- terrible I mean it might allow companies to keep the match that otherwise wouldn't keep better at all or wouldn't reduce -- so that's something to keep in mind.

I was gonna say because you'd be more worried is an employee if they just so I'm not yet we're not matching -- all right because then that would tell you something about the -- financial health of the company right.

-- and that is exactly what people think and how they feel.

But the other problem is you know there is this dollar cost averaging component -- and it's sort of one of those that that plus the miracle of compound interest is what's supposed to get us through retirement re -- mean is that these are accounts that you build up gradually over time.

So it is a concern to you know financial planners and -- looking at how borrowing -- are supposed to work and how we're trying to encourage people to put more into them.

It is seen by many as a step in backwards if this catches on among other big companies I don't think -- -- -- looking at it.

Well on the Labor Department in the well dad -- both but -- both of them very that we have be latitude to make rules that would govern exactly what companies can do it must respect.

Because IBM's huge company obviously but today it's one of everybody start not everybody but -- a lot of people start doing this when -- a lot of strange situations.

Unfolding at the end of the year addition play.

You have a lot of layoffs announced may be right before this or where you have a lot of people quitting right after written and things like that which.

You know could be used you become asked suddenly unbalanced in the weighted labour forces kind of -- the.

-- struck -- -- how many people really make other decisions based on this but.

At what could -- could derived whether people.

Decide to take retirement packages are not -- because -- the way IBM structured it is if you retired you still get the match.

Bride says there that might be something and might even be kind it's something kind of subtle in your decision making him the benefit them yet it just 'cause a lot of ramifications.

So many companies cut the match out -- GAAP financial crisis in no way how are a -- back -- of the pre crisis levels -- terms of matching.

Terms of the number of the company who you ask.

I think really it's a very hard to track it's hard to track and there and there is a lot of data that shows that we're really not back to where we -- But there are companies that there are a lot of companies that have fully restored that there are others that have done so.

Bad and that have turned it as they have restored that they haven't done it to the previous level that they have in the past -- Kelly great story in turn expects real people so thanks for -- -- and talk to us about it thank you thank you -- -- -- campaign.

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