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Personally, I applaud this decision. It should be illegal only offer a fund-based retirement account. Company provided 401k funds are nothing but kickbacks to

Personally, I applaud this decision. It should be illegal only offer a fund-based retirement account. Company provided 401k funds are nothing but kickbacks to Wall Street.

lisplist 3y ago
The fund is based on 10Y treasury bonds which have significantly underperformed the S&P historically. First 3 years, you get a 6% guaranteed return. The remainder, you get only 3% guaranteed. For reference, my HYSA yields 4% a year.
- cool_dude85 3y ago
  Presumably IBM invests this money and pockets the difference. What a scheme - your employee retirement plan is actually a profit center. Fucked up that this could be allowed to happen.
  - sidewndr46 3y ago
    The financialization of IBM is now complete, as they attempt to make as money off their own employees as possible.
    - linuxftw 3y ago
      They only offer a 5% discount for their ESPP with no lookback. They've been using employees to prop up share price for quite some time.
      - jonfw 3y ago
        ESPP is 15%
        linuxftw 3y ago
        It wasn't several years ago, and it was 5% for a very long time. Looks like they raised it last year.
- pinewurst 3y ago
  Plus most importantly it's non-portable. You're dependent on their good will (hah!) for the ability to retrieve it from them in the future at whatever (partial) rate they decide they can get away with. I thought they were criminals for going to lump sum match. This is net level stuff...
  - temp_praneshp 3y ago
    Their email calls it immediately vested + portable. Why/how would it be non-portable?
- celestialcheese 3y ago
  In 3 years, if IBMs fund is paying 3%, your HYSA is going to be the same or less. HYSA's are just a treasury fund minus a few bips
  - lisplist 3y ago
    Fair, just giving a point of reference
mikece 3y ago
I wish I could specify which financial provider I wanted to use for managing my accoiunt, provide info similar to ACH info for direct deposit, and go from there (ditto with HSA). Instead, I have to remember to roll-over 401k account assets after I change jobs, something I cannot do immediately and easily forget about.
- scarface_74 3y ago
  When I just started a new job. They told me to go anywhere and set up an HSA and give them a form
- xyzelement 3y ago
  I get that what you're describing would be "better" but sounds like a very small deal. How often are you switching jobs that rolling all those 401ks is a real burden? The reality behind it is that 401k administration is a heavy and expensive process and the reason it's all pooled together at one provider is that. Obviously once you're done, you can take it anywhere into an IRA.
  - xur17 3y ago
    > I get that what you're describing would be "better" but sounds like a very small deal. How often are you switching jobs that rolling all those 401ks is a real burden? It's not just the rollovers when you switch jobs. It's also being locked into whatever funds (and fees) the plan your company selected offers. Especially given you can go standup a full 401k for yourself if you are self employed for free (at Fidelity amongst other places).
- jkaplowitz 3y ago
  > (ditto with HSA) For HSA, you can do a variation of that: open a separate HSA anywhere you want and set up recurring monthly trustee-to-trustee (i.e. direct) transfers of your payroll contributions plus any employer contributions from one HSA to the other. This can all happen while you're employed. You still need to make sure to adjust the transfer amounts any time you or your employer contributes less to the employer-affiliated HSA, generally avoid overdrawing either account, and make sure to count your contributions only once per year at tax time. But there are no other downsides.
xnx 3y ago
I wish there weren't as many tax law distortions that make employer-sponsored healthcare and retirement a thing at all.
scarface_74 3y ago
And you’re comfortable with being tied to your company in retirement? Are you comfortable with not being able to easily transfer your money when you change jobs?
huytersd 3y ago
I agree with you but this isn’t a true pension. It’s just an investment strategy that offers yields that barely cover inflation. If it were a true pension with x% of your take home monthly after you retire till death I would be on board with your comment. In this case the 401k is the lesser of the two evils.
missedthecue 3y ago
The investment fees on a 401k are very low. My index funds are at 0.03% right now. Fancier bond or emerging market funds are even then only at 0.40% But look at Calpers. They have $500 billion in management and an annual budget of $2.5 billion. That's a huge amount just to run the damn thing. And then they go and invest in private equity, hedge funds, and VC funds, all charging their variation of 2/20 on top of everything. 401ks and pensions are ultimately invested in the same thing. The equity and debt of businesses. But 401ks have much lower fees.

Personally, I applaud this decision. It should be illegal only offer a fund-based retirement account. Company provided 401k funds are nothing but kickbacks to Wall Street.

lisplist 3y ago

The fund is based on 10Y treasury bonds which have significantly underperformed the S&P historically. First 3 years, you get a 6% guaranteed return. The remainder, you get only 3% guaranteed. For reference, my HYSA yields 4% a year.

cool_dude85 3y ago
Presumably IBM invests this money and pockets the difference. What a scheme - your employee retirement plan is actually a profit center. Fucked up that this could be allowed to happen.
- sidewndr46 3y ago
  The financialization of IBM is now complete, as they attempt to make as money off their own employees as possible.
  - linuxftw 3y ago
    They only offer a 5% discount for their ESPP with no lookback. They've been using employees to prop up share price for quite some time.
    - jonfw 3y ago
      ESPP is 15%
      - linuxftw 3y ago
        It wasn't several years ago, and it was 5% for a very long time. Looks like they raised it last year.
pinewurst 3y ago
Plus most importantly it's non-portable. You're dependent on their good will (hah!) for the ability to retrieve it from them in the future at whatever (partial) rate they decide they can get away with. I thought they were criminals for going to lump sum match. This is net level stuff...
- temp_praneshp 3y ago
  Their email calls it immediately vested + portable. Why/how would it be non-portable?
celestialcheese 3y ago
In 3 years, if IBMs fund is paying 3%, your HYSA is going to be the same or less. HYSA's are just a treasury fund minus a few bips
- lisplist 3y ago
  Fair, just giving a point of reference

mikece 3y ago

I wish I could specify which financial provider I wanted to use for managing my accoiunt, provide info similar to ACH info for direct deposit, and go from there (ditto with HSA). Instead, I have to remember to roll-over 401k account assets after I change jobs, something I cannot do immediately and easily forget about.

scarface_74 3y ago
When I just started a new job. They told me to go anywhere and set up an HSA and give them a form
xyzelement 3y ago
I get that what you're describing would be "better" but sounds like a very small deal. How often are you switching jobs that rolling all those 401ks is a real burden? The reality behind it is that 401k administration is a heavy and expensive process and the reason it's all pooled together at one provider is that. Obviously once you're done, you can take it anywhere into an IRA.
- xur17 3y ago
  > I get that what you're describing would be "better" but sounds like a very small deal. How often are you switching jobs that rolling all those 401ks is a real burden? It's not just the rollovers when you switch jobs. It's also being locked into whatever funds (and fees) the plan your company selected offers. Especially given you can go standup a full 401k for yourself if you are self employed for free (at Fidelity amongst other places).
jkaplowitz 3y ago
> (ditto with HSA) For HSA, you can do a variation of that: open a separate HSA anywhere you want and set up recurring monthly trustee-to-trustee (i.e. direct) transfers of your payroll contributions plus any employer contributions from one HSA to the other. This can all happen while you're employed. You still need to make sure to adjust the transfer amounts any time you or your employer contributes less to the employer-affiliated HSA, generally avoid overdrawing either account, and make sure to count your contributions only once per year at tax time. But there are no other downsides.

xnx 3y ago

I wish there weren't as many tax law distortions that make employer-sponsored healthcare and retirement a thing at all.

scarface_74 3y ago

And you’re comfortable with being tied to your company in retirement? Are you comfortable with not being able to easily transfer your money when you change jobs?

huytersd 3y ago

I agree with you but this isn’t a true pension. It’s just an investment strategy that offers yields that barely cover inflation. If it were a true pension with x% of your take home monthly after you retire till death I would be on board with your comment. In this case the 401k is the lesser of the two evils.

missedthecue 3y ago

The investment fees on a 401k are very low. My index funds are at 0.03% right now. Fancier bond or emerging market funds are even then only at 0.40% But look at Calpers. They have $500 billion in management and an annual budget of $2.5 billion. That's a huge amount just to run the damn thing. And then they go and invest in private equity, hedge funds, and VC funds, all charging their variation of 2/20 on top of everything. 401ks and pensions are ultimately invested in the same thing. The equity and debt of businesses. But 401ks have much lower fees.