International Business Machines is changing how it makes matching contributions to employee 401(k) plans. THe company will still contribute about 6 to 10 percent of an employee's salary but starting next year, instead of making matching contributions throughout the year, the firm will make a single lump-sum contribution at the end of the year.
The move is expected to save IBM millions but would ultimately mean a reduction in employee benefits as employees won't get the dollar-cost averaging. Benefits experts say the move by IBM, widely considered a leader in employee benefits, could prompt other companies to follow suit.
"This change reflects our continuing commitment to invest in our employee 401(k) plans while maintaining business competitiveness in a challenging economic environment," IBM said in a statement.