AOL, IBM and 8% of American companies move to annual match for 401k

[Anonymous]

My company does this, and I think it stinks. But at least there is some matching, so I suppose I can't complain too much. My husband's company offers none!

[Anonymous]

My company does an annual match. We have 10,000+ 401k participants and supposedly it's because it's a PITA to do biweekly. You have to recalculate eligibility and active/LOA status plus vesting on a rolling basis instead of point in time. I think it's just because they're cheap, and don't want to invest in resources to do the work or pay for the max number of people... If they wait until the new year they can bank all the match funds for people who quit.

[Anonymous]

Our firm matches 7.5% throughout te year. It's pretty damn rich.

[Anonymous]

My company matches 12%' throughout the year - but you're only fully vested after 5 years. However, if you leave in your second year, for example, you would take be able to take the vested amount up until that point in time.

I wish this type of stuff was more transparent during job searches because I would try not to work for a company that does 401K matching like AOL and others. Also the PTO structure seems to vary at companies as well.

[Anonymous]

AOL just announced that it is going back to matching every pay period.

[Anonymous]

Anonymous wrote:AOL just announced that it is going back to matching every pay period.

there's a shocker.

[Anonymous]

Anonymous wrote:I hope AOL's board docks Tim Armstrong's pay for the reputation damage he's done to his company's brand this week.

There's a lot more to this story. Yes, they moved from matching 401k contributions as they are made (which 92% of companies do) and switched to making a lump-sum, once-a-year match for employees still employed on Dec. 31. The negative effect of this is twofold:

1) The employee lose the benefit of dollar-cost averaging on the match (but not their own contributions)
2) If you leave the company for any reason, you forego that year's cumulative match.

Armstrong was really despicable though. First he blamed th Affordable Care Act, saying it was a $7 million expense (as if this is material for a company with $2.4 billion in revenues and $996 million in profits, that happens to pay him an exorbitant sum). Then, he literally blamed it on the "distressed babies" of exactly two babies of AOL employees. So basically he told AOL's employees to suck it up because two employees had babies born with special needs.

Again, if I was on that board, I'd be all, "what the fuck, dude?"

I thought health care expenditures were supposed to be private. What's next? Will he blame psychotherapy costs due to someone's divorce?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I hope AOL's board docks Tim Armstrong's pay for the reputation damage he's done to his company's brand this week.

There's a lot more to this story. Yes, they moved from matching 401k contributions as they are made (which 92% of companies do) and switched to making a lump-sum, once-a-year match for employees still employed on Dec. 31. The negative effect of this is twofold:

1) The employee lose the benefit of dollar-cost averaging on the match (but not their own contributions)
2) If you leave the company for any reason, you forego that year's cumulative match.

Armstrong was really despicable though. First he blamed th Affordable Care Act, saying it was a $7 million expense (as if this is material for a company with $2.4 billion in revenues and $996 million in profits, that happens to pay him an exorbitant sum). Then, he literally blamed it on the "distressed babies" of exactly two babies of AOL employees. So basically he told AOL's employees to suck it up because two employees had babies born with special needs.

Again, if I was on that board, I'd be all, "what the fuck, dude?"

I thought health care expenditures were supposed to be private. What's next? Will he blame psychotherapy costs due to someone's divorce?

My guess is that AOL, like most large companies, is self-insured. So, they know full well when a couple of employees have a lot of costs. I don't doubt that it's technically true that the pool's cost increased due to two babies. But it's pretty crass to blame the rise in premiums on them. That's how the cookie crumbles.

Also, the notion that the ACA was the added expense is ridiculous. Without the ACA, AOL's health care costs probably would have risen even HIGHER than they did.

[Anonymous]

Anonymous wrote:My company matches 12%' throughout the year - but you're only fully vested after 5 years. However, if you leave in your second year, for example, you would take be able to take the vested amount up until that point in time.

I wish this type of stuff was more transparent during job searches because I would try not to work for a company that does 401K matching like AOL and others. Also the PTO structure seems to vary at companies as well.

It's not comprehensive, but you can get some sense of this using www.brightscope.com. For example, [url]http://www.brightscope.com/form-5500/basic-info/1251705/Aol-Inc/13796227/Aol-Savings-Plan

This shows that 187 people left AOL last year and gave up unvested matches.

[Anonymous]

http://www.brightscope.com/form-5500/basic-info/1251705/Aol-Inc/13796227/Aol-Savings-Plan/

[Anonymous]

Mine does the annual match too, but it's only 3 percent, not enough to make a massive difference, but still just miserly.

[Anonymous]

Anonymous wrote:I hope AOL's board docks Tim Armstrong's pay for the reputation damage he's done to his company's brand this week.

There's a lot more to this story. Yes, they moved from matching 401k contributions as they are made (which 92% of companies do) and switched to making a lump-sum, once-a-year match for employees still employed on Dec. 31. The negative effect of this is twofold:

1) The employee lose the benefit of dollar-cost averaging on the match (but not their own contributions)
2) If you leave the company for any reason, you forego that year's cumulative match.

Armstrong was really despicable though. First he blamed th Affordable Care Act, saying it was a $7 million expense (as if this is material for a company with $2.4 billion in revenues and $996 million in profits, that happens to pay him an exorbitant sum). Then, he literally blamed it on the "distressed babies" of exactly two babies of AOL employees. So basically he told AOL's employees to suck it up because two employees had babies born with special needs.

Again, if I was on that board, I'd be all, "what the fuck, dude?"

Article by the mother of one of the "distressed babies" here:
http://www.slate.com/articles/double_x/doublex/2014/02/tim_armstrong_blames_distressed_babies_for_aol_benefit_cuts_he_s_talking.html

[Anonymous]

If Armstrong made 400k, bet he would not have fucked with the 401k.

[Anonymous]

Do you think AOL could get a CEO for 5 million a year who would be just as good or better than TA?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I hope AOL's board docks Tim Armstrong's pay for the reputation damage he's done to his company's brand this week.

There's a lot more to this story. Yes, they moved from matching 401k contributions as they are made (which 92% of companies do) and switched to making a lump-sum, once-a-year match for employees still employed on Dec. 31. The negative effect of this is twofold:

1) The employee lose the benefit of dollar-cost averaging on the match (but not their own contributions)
2) If you leave the company for any reason, you forego that year's cumulative match.

Armstrong was really despicable though. First he blamed th Affordable Care Act, saying it was a $7 million expense (as if this is material for a company with $2.4 billion in revenues and $996 million in profits, that happens to pay him an exorbitant sum). Then, he literally blamed it on the "distressed babies" of exactly two babies of AOL employees. So basically he told AOL's employees to suck it up because two employees had babies born with special needs.

Again, if I was on that board, I'd be all, "what the fuck, dude?"

I hope they fire him. Why is it that mini Putins rule corporate America and we put up with it?

Armstrong's delivery of the news was unfortunate and in bad taste, but at least he was honest.

A lot of other companies out there who decide to go down this path to change 401K's won't either bother to give you an explanation or will spin it to say how great the new plan is.