401K in the news

[Like2Plan]

Today, CBS news did a story regarding the comments Tim Armstrong made during a town hall meeting in regards to changes to AOLs 401K plan link to CBS story

I was curious as to what the change to the AOL 401K plan was...
Here is an article from the Washington Post about the changes: AOL is leading the way to make 401(k)s worse for everyone

Apparently, they were going to change from matching at the time the employee made the contribution to a lump sum contribution at the end of the year (and only if the employee was still active in the company) as a money saving measure.

The AOL plan ratings on Brightscope list it as lowest fees, above average company generosity and above average participation. (I read on one of the news stories that AOL matches up to 3% of salary.)
(Link to Brightscope for 401K ratings)

According to a survey done by AONHewitt (from the Washington Post article), the vast majority of employers (86%) contribute a match with each paycheck and only 8% doing a match at year's end in line with previous years (no mention of what the remaining 6% do).

I realize these news stories cover lots of different topics (from a CEO making regrettable comments to erosion of benefits). What I'm waiting for is the story about 401K plans with more generous matches.

[YLTL_Dan]

I have a friend whose company does the same thing... doesn't pay the match until the end of the year. Really bogus in my opinion, and I would seriously consider not joining a company because of that sneaky little move.

[humandraydel]

When I first heard of this I was appalled, however this isn't any worse than companies that make you vest in the 401k match over a period of 5 years. I'm not sure how common that is, but my current job has that policy.

[Like2Plan]

When I first heard of this I was appalled, however this isn't any worse than companies that make you vest in the 401k match over a period of 5 years. I'm not sure how common that is, but my current job has that policy.

I don't like the 5 years to vest in the match, either. DH's company has the same policy.
I noticed on the Brightscope website that about 12% of participants terminated employment during the plan year with accrued benefits that were less than 100% vested (for DH's current plan).

The distressing thing about the AOL plan was it was such a drastic switch for those already there--maybe not enough incentive to leave a job, but maybe to look around and see what other companies are offering.