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February 25, 2014 at 06:08 AM
Massachusetts securities regulator William Galvin told the 25 largest 401(k) pension providers in the state in a Monday letter to tell him by March 10 if they have shifted to year-end lump-sum employer matching and to detail the potential risks such a move creates for employees.
Galvin cites AOL’s reversal earlier in February of its plan, abandoned after employee pushback, to make matching contributions at the end of each year instead of each pay period.
Galvin notes in his letter the moves by Deutsche Bank, IBM and Charles Schwab to shift their employees’ benefits by paying matches in an annual lump sum.
“At a time when most Americans have much of their retirement savings in these 401(k) plans, it is crucial that they are made aware of the risks involved when a company shifts to a year-end distribution,” Secretary Galvin said.
