Beginning in 2024, IBM will no longer match employee contributions to their 401(k) plans. The news broke in early November, and reactions to the end of the match — which will be replaced by a 5% retirement benefit — have been mixed, sparking conversations about what the move could mean for the future of retirement plans.
In addition to the new automatic 5% benefit provided by IBM, called a Retirement Benefit Account (RBA), employees will receive a one-time 1% pay increase. For the first three years of this new plan, all employees are guaranteed a 6% annual interest rate, at which point IBM guarantees 3% of the rate on 10-year treasuries. Compared to a 401(k), IBM employees have expressed concern around lower returns and less control over their retirement funds.
