Provide Financial Advice for Workers
By Jilian Mincer
The Wall Street Journal
Friday, March 9, 2007
International Business Machines said it will provide free,
comprehensive financial advice to its 127,000 U.S. employees as
the company prepares to replace its pension with an enhanced
The advice, which will be tailored for individuals, will go far
beyond how employees should invest in the company's 401(k), also
covering topics such as college savings, debt management and
retirement savings outside the company plan. While financial
planning is a common perk for executives, this is believed by
experts to be the first time a major U.S. company is providing
this level of individualized advice to all employees.
It isn't clear how quickly, or whether, other companies will
match IBM's new plan. IBM is often a leader in benefits
practices, and some benefits consultants say the trend toward
providing more-comprehensive advice will continue to grow.
IBM may have felt it necessary to sweeten the pot for employees
after the changes it has made to its retirement benefits in
Some employees sued IBM in 1999 after the company switched from
a traditional defined-benefit plan to a "cash balance" plan,
which paid lower benefits to some older workers. In January
2006, IBM said it was eliminating its pension plan to save
money, and would switch to an enhanced 401(k).
IBM spokesman Clint Roswell says the company is providing the
new "IBM MoneySmart" program because employees need more
financial information. "We realized the burden has shifted, and
there's a strong sense of our legacy," he says.
Fidelity Investments and the Ayco Company LP, a unit of Goldman
Sachs Group, will develop and deliver the new program, which is
being launched later this month. While a number of companies
offer Web-based advice to workers, especially about their 401(k)
plans, the IBM program will provide individualized advice on a
wide range of financial issues.
The program will provide online tools, educational seminars and
one-on-one telephone and in-person planning sessions with
financial advisers. Partners and spouses also will be able to
attend the seminars and counseling sessions.
Until now, IBM has provided both a pension and a match to
workers who contributed to the company 401(k) plan. After Dec.
31, employees will stop accruing new benefits in its pension
Write to Jilian Mincer at