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I guess to fully assess the move, you'd have to know IBM's entire welath/retirement package. But on the face ot it, I have a pretty strong dislike of the move for all the reasons you stated. Given that 401(k)s were introduced as a cost savings to DB plans, to see them now slowly erode away is troubling as it's well documented that we have trouble saving enough for our retirement goals.

I particulary hate the dollar-cost averaging aspect of it.

The flip side is that workers need to start voting with their feet. If IBM doesn't see a hit to recruiting or retention, it just shows that companies can get away with these cuts.

Sense that IBM is a pale shadow of its former great iconic giant self, having outsourced so many of its former internal support functions.

Joe, thanks for your thoughts. I agree that we don't have enough information about the Total Rewards to put ourselves in employee shoes but some facts about what it means to them have been out in the public. Since salary opportunities continue to be limited, retirement savings is harder than ever before. I wrote this because IBM is considered a "bellweather" for other companies and from a retirement standpoint, it's quite a shift. When IBM changed their DB plan into a cash balance plan it made a lot of news because it was so unpopular among employees and the media seemed very skeptical. IBM didn't keep it for very long, and shifted to the 401k as its sole vehicle, so long service IBM employees have experienced a long of change in their retirement benefits.

Yep, Jim, it will be interesting to see whether the press follows this story any further.

Big Blue ain't what it used to be. In my view this is just a blatant exercise in reducing cost at the expense of employee satisfaction. The poorly worded and manipulating explanation provided only pours salt into the wound.

It may also be a calculated move to increase turnover in 2013 so they can reduce the expense of a planned reduction in force.

One thing IBM isn't is stupid.

John, your assessment of the reduction in force "strategy" aligns with the Compensation Cafe philosophy that everything you do in compensation is communications. 2013 will likely bring more news at IBM as you point out, a company that seems to want to be transparent about their cold indifference to their employees. Let's hope their style of prevarication doesn't catch on -- it's been popular before, as you know.

The press will pick up on this the next time IBM has a big RIF. Especially if it happen in q3 or q4 next year.

This is what all public companies need to be careful about. When shareholders are focused on returns of 3 years or less AND they have strong influence on management decisions, we will see this kind of change.

Management kind of dug their own grave with this. By a greedy few paying themselves without credible evidence of performance shareholders got a voice. By things not changing shareholder got power. Now, it seems, some may get their just desserts

If they can get away with that, they will soon aim to only make a contribution every five or ten years. They'll tie in making a contribution to the length of the time that an employee has spent with them.

Unbelievable. It's not like they are strapped for cash. They are cheating the employees of the interest that would have been earned for all of that time.

I agree Tanya and Dan, let's keep an eye on how this plays out over 2013. It does sort of seem like a backhanded intro into layoffs, as you point out, Dan. If so, it may be this Recession's version of an "early out" retirement offer. We all know how well those worked -- intellectual capital heads for the hills, leaving a depleted company. What's the quote about those who don't know history are doomed to repeat it? (Edmund Burke's, I believe.)

thought the "history" line was George Santayana's, but I'm too lazy to cheat and look it up...

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