401(k) accounts are an important part of many people’s retirement savings.  And the employer match is a critical part of that system.  So when big companies like IBM and AOL start monkeying with that match, you should pay attention because other companies may follow suit!

IBM changed its 401(k) system in 2012 to hand out employee matches in one lump sum at the end of the year leading to an uproar.  IBM employees are now missing out on compounding throughout the year that they used to get from contributions peppered in throughout the year.  In addition, if you leave IBM before December 15th and you’re not retiring, you lose the match entirely.

Experts warned that others would try to follow IBM’s example by watering down their 401(k) programs as well.  Sure enough, AOL took things even further!

AOL said starting in 2014, an employee must be active on December 31st to receive the company match.  Furthermore, the contribution will a “one time lump sum after the end of the Plan Year.”  So you have to stay with the company through the end of year and you don’t even get the match during 2014!

The protest following AOL’s announcement was so intense, AOL chief Tim Armstrong reversed the changes to the 401(k) policy after just one week of bad publicity.