IBM cancels 401k matching, replaces with proprietary pension fund RBA

&gt; Update:<p>&gt; So they are not replacing 401k, they are offering RBA separately. You are still able to contribute to your 401k. However they are not contributing to the 401k anymore. They will be contributing 5% of your salary to your RBA with no employee contribution needed. After 3 years of 6% interest (starting 2027) it will equal the 10 year US treasury yield. Where IBM will guarantee it’s no lower than 3% per year.<p>That doesn&#x27;t sound like a good deal at all.<p>Anyone know what is prompting this change?

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When I was at IBM <i>mumbles</i> years ago they cancelled their pension fund in favor of a 401K program. I don&#x27;t remember the specifics of the classic pension fund except that it worked like a classic pension fund. I assume this is worse than either of the two.<p>At the time, the old timers were annoyed as the conversions did not generally work in their favor, although the old old timers were allowed to stay on the pension.

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I can&#x27;t wait until IBM eventually declares that the RBA, as a pension fund, is unsustainable for them and that they&#x27;re going to move to a 401k or look at cash outs.

&gt; <i>IBM is able to provide a benefit to IBMers that also helps diversify their retirement portfolios.</i><p>How is this helping diversify a retirement portfolio?<p>(Compared to the usual advice of total-market stock and bond index funds.)

This is wonderful. Workers have it too easy.<p>Think of the poor shareholders. They need money too!

Why did pensions go away? Is the dynamic nature of 401ks that much better? I always found it quite strange that not only am I expected to be an expert in my field, but also must be a near expert in financial investing to not end up being homeless in my old age.

Does anyone know if Red Hat employees are equally screwed? They were exempt from the IBM 401k-match-only-at-end-of-year game.

Gotta keep those profits going up, no matter what. Eventually everything gets liquidated for the sake of the shareholders, exactly as the shareholders intend.

&gt; <i>By introducing this retirement benefit within IBM’s Personal Pension Plan, which is stable and well-funded,</i><p>This corporate communication sounds slimy, but I&#x27;m wondering about the &quot;stable and well-funded&quot; part: is this new infusion of money propping up the pension plan?

<a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=38101464">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=38101464</a> additional thread&#x2F;Boggleheads Forum

Does this impact Red Hat as well?

IBM (and spinoff Kyndryl&#x27;s) 401k Match only at the end of the year and only if you are still an active employee (or retired) was already bad enough. At least Kyndryl increased the match to 6% instead of only 3%. I left in 2023 from Kyndryl and due to the match only at end of year will not receive 401k matching contributions for 2023. This just makes their 401k even shittier than it already was.

IBM is zombie that needs to just die.

Why any single person would choose at this time to still work at IBM is beyond me. Talk about a company that saw its best days half a century or more ago

Does anyone really consider how much 401K matching an employer does when considering a job?

So those who want pensions can get pensions and those who want a 401k can get that. Seems fine.

Personally, I applaud this decision. It should be illegal only offer a fund-based retirement account. Company provided 401k funds are nothing but kickbacks to Wall Street.