I remember starting my second job in journalism – as a news editor for Fairchild Publications, publisher of Women's Wear Daily and other fashion business pubs. I started the gig on Jan. 3 because I was going in for a root canal the day before.
It wasn't until much later that HR told me I wasn't eligible for my 401(k) match that year because I hadn't started my job at the beginning of year. My new editor hadn't mentioned it to me – he probably didn't even know. One of their little rules. Except that Fairchild was owned by Cap Cities, which later was acquired by ABC in a deal that made a lot of Fairchild employees wealthy. Me not so much. Because of one of their little rules.
Cut to last week when AOL announced that only employees who are "active" on Dec. 31 will be given a matching contribution. And that total wouldn't be distributed until the following year.
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Talk about a game changer. It was a move by a major corporation that has the capacity to affect so many components of a worker's life – like when you start a job, when you retire, how a worker manages tax gains and losses. Even planning for your kids' futures, to name just a few.
Rightfully so, AOL employees went ballistic, forcing Armstrong to reverse the policy only days later. But I guarantee you it won't be the last time a Fortune 500 tries to fine-tune retirement benefits to make a little extra scratch.
I read IBM pulled a similar move a couple of years ago when it declined to match the 401(k) account of anyone who had the temerity to leave the company before Dec. 15 of the same calendar year, if they weren't retiring.
Essentially, the tech services giant penalized employees who wanted to grow their careers but weren't willing to do so on IBM's timetable. I would think more than a handful of employees passed on potentially exciting opportunities to lock down their company match. And, of course, IBM made millions in the money it saved that would have gone to matches.
That change is still in effect.
AOL was attempting the same thing, except with a raised bar. For workers considering a move—for personal or financial reasons, it would have becomes a protracted process, in some cases, causing them to map out a career strategy spanning more than 12 months.
Fortunately, those who work at AOL spoke loudly enough to reverse Armstrong's decision. And maybe that hue and cry will be heard by enough companies to keep that particular cost-saving plan at bay for years to come. Or at least until the next generation forgets about it.
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