Perspectives

IBM has decided to halt 401(k) matches to fund a new defined benefit (DB) plan for its employees.

Starting January 1, 2024, IBM will offer a DB plan that requires no employee contribution, ensuring stable, predictable retirement benefits.

IBM believes that a DB plan, once thought to be a relic, can offer better risk-adjusted returns and be more employee-friendly.

The move marks a significant shift in retirement planning, challenging the current trend away from DB.

As a leader in moving away from DB plans, could IBM's move signal a potential new trend in employee retirement benefits?

And as the UK is somewhat commercially and culturally downstream of the US, could we see UK companies follow IBM's lead in prioritizing DB over DC?

Click here to read the article in Forbes.