401K Benchmarking Exercise - Assistance Requested - post regarding Bank of America layoffs

401K Benchmarking Exercise - Assistance Requested

I currently work at BNY Mellon. Our CEO recently announced a change to the 401K plan. Currently our company match (max 7%) is implemented each pay period. Starting in 2023, the match will be paid at the end of the year (actually, three months after year-end). This change will result in any employees who leave before year-end missing out on contributions to their 401K plan. At a recent town hall, our CEO justified the change by stating that the company has decided to pay out this reward only to employees that will be with us in the future, and also that this new policy is in line with industry practice.

Current trust in our management is low. In addition to this change, the CEO announced with great fanfare that all members of staff that don’t currently receive shares will receive a gift of 10 shares. The media has picked up this story, though none have reported that this “gift” is coming out of our year-end bonus. So, instead of just receiving an all-cash reward, part of our bonus is being deferred 3 years, assuming we are still with the company. Yea!

Given our low trust in management, I am curious as to the validity of the statement that this new 401K policy aligns with industry practice. As such, I am posting this message on this website for all companies listed in our proxy statement as being peers of BNY Mellon. I would appreciate information on the following questions:
• Is the 401K match paid each pay period or at year-end?
• What is the maximum match provided by the company?

Thank you reading and hopefully participating.

Comment! It's anonymous!

4 replies (most recent on top)

Thank you for the information, much appreciated.

I am not in HR, so hopefully someone more knowledgeable can chime in, but in the spirit of sharing some insight...

There are many different strategies utilized by Employers (the Plan Sponsor). I recall papers and trend reports by EBRI - Employee Benefit Research Institute - an independent 3rd party, on this that you might wish to explore. Google them.

BofA seems quite generous (and I am an actual employee, not HR troll, in saying this) in 2 ways:

BofA matches on an Annual Basis -- not the per-pay-period accrual only.
If you overfund your 401k early in the year (like me, electing a higher contribution amount earlier in the year, say during Feb bonus period, to my full contribution limit -- (I always think I am going to leave the company "soon" and not be here at yearend), they match the usual 5% in that period. The plan rules specify they can match 5% of eligible comp, so the clock ticks on.... THEN in Feb the following year -- even if I leave -- they award a "True Up" to match my full contribution to make you whole. Sorry am not doing a very clear job explaining. if you google it, there are many explanations, like this one:

https://www.betterment.com/work/resources/true-ups

I called BofA HR dept to ask, if I left mid-year, for whatever reason (another job, become stay at home parent, retire...), would i lose my full match? They said this is a good question that few ever think to ask. HR rep seemed very pleased to share that they offer this benefit, so it sounds like not many others do.

Yours sounds like something diff may be going on, like maybe they are trying to we-ponize their 401k into a retention play. If so, I'd think that would have the opposite effect. It does seems to be up to them though and how they want to write their plan's rules.

Good luck to you and hope this helps in some way.

IBM did this. Used to match every pay period. Then that changed to once a year. You had to be on the payroll on December 15th to get the match. Guess what your last day was when they laid you off?

We have something similar but not for the full amount. I believe they match 5% ppp and then in March you get an additional 2 or 3% (depending on tenure).

Thread regarding Bank of America layoffs

401K Benchmarking Exercise - Assistance Requested

4 replies (most recent on top)

Post a reply