Business

401(k): IBM draws ire

IBM, the largest computer-services provider, drew fire from a worker organization for a change to its 401(k) retirement plan that cuts the frequency of company contributions to once a year.

The Armonk, NY-based company will switch from matching employee contributions to 401(k) plans twice a month, to every Dec. 15, a move that “shortchanges IBM employees,” Alliance@IBM said on its website. While the amount employees receive isn’t changing, workers who leave before Dec. 15 won’t get their payment for the year.

IBM said the change was made to help keep the company competitive. The move may set a precedent for companies looking for savings in employee benefits, said 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 said in an interview. “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.”

Alliance@IBM has asked IBM to reinstate the semi-monthly plan and is trying to organize workers with the goal of forcing IBM to engage in collective bargaining.

IBM stock closed at $191.95 yesterday, up 1.2 percent from the previous day.