(Bloomberg) — IBM, the largest computer-services provider, is being criticized by a worker organization for a change to its 401(k) 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 says 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 says the change was made to help keep the company competitive. The move may set a precedent for companies looking for savings in employee benefits, says 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 says. “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.”
While IBM doesn’t disclose how many U.S. employees it has, Alliance@IBM estimates there are 84,500, out of a total of more than 400,000 worldwide.
Alliance@IBM, which is affiliated with the Communications Workers of America, has asked IBM management to reinstate the semi-monthly plan. The group is trying to organize workers at the company with the goal of forcing IBM to engage in collective bargaining.
“This change reflects our continuing commitment to invest in our employee 401(k) plans while maintaining business competitiveness in a challenging economic environment,” IBM says in a statement e-mailed by Doug Shelton, a spokesman.
