IBM OFFERS WORKERS FINANCIAL ADVICE
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • BentallGreenOak agrees to acquire Metropolitan Real Estate Equity
      watch video
      0:45
      Private funds weathered 2020 turmoil
      Daniel McHugh
      Aviva Investors promotes from within for real assets CIO
      Marc Rowan
      More alts managers seek expansion to retail market
    • Kieran Mistry
      Hymans Robertson picks head for new non-traditional risk transfer unit
      Troy Saharic
      NEPC brings on director of new business development
      Bill Foley
      Foley-backed SPAC agrees to $7.3 billion deal with Alight
      Jason Schwarz, chief operating officer of Wilshire,
      New owners have big plans for future of Wilshire
    • A pharmacist administers a dose of the COVID-19 vaccine in Mountain Brook, Ala., on Feb. 21, 2021
      Business optimism grows as vaccinations spread – Fed
      watch video
      0:59
      Coronavirus and the S&P 500: February 2021
      Multiemployer pension measures cleared for relief bill vote
      The Charging Bull statue is covered in snow near the New York Stock Exchange on Feb. 11, 2021
      Bain: Private equity managers finish 2020 strong
    • DCALTA releases daily valuation tool for alts in DC plans
      PSCA: Employee participation in non-qualified deferred comp plans rising
      Profile of backlit woman against at TV monitor with female symbols on it
      Women outperform men in managing DC plans – Morningstar
      A  Malaysia flag flies in Putrajaya on Sept. 23, 2020
      Malaysia’s EPF ends 2020 up 7.9% at almost $250 billion
    • Michael Herskovich
      BNP Paribas Asset Management names global head of stewardship
      TPT Retirement taps into low-carbon strategies
      Gary Gensler
      Nominee Gensler backs SEC climate risk disclosure
      Emissions from a smokestack in Poland
      Asset managers facing more scrutiny on ESG issues – report
    • Spirit winners
      Prudential honors young people who are helping out
      2 U.K. pension execs take on ESG investing in new podcast
      Donation illustration
      Jefferies will use trading commissions to do good
      Michael Arougheti
      SPACs ride wave as latest investment darling
    • Robert 'Rob' Shafir listens during a Senate Permanent Subcommittee on Investigations hearing in Washington on Feb. 26, 2014
      Sculptor hedge fund hits sixth straight year of outflows
      The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone in an arranged photo.
      GameStop frenzy has hedge fund managers rethinking next moves
      Gabe Plotkin, chief investment officer and portfolio manager of Melvin Capital Management, speaks during the Sohn Investment Conference in New York on May 6, 2019
      Citadel, Point72 back Melvin with $2.75 billion after losses
      Shanghai skyline
      Global hedge funds struggle even in a more open China market
    • Amanda Agati
      PNC chooses new CIO for asset management group
      Full suite of concerns add complexity to 2021 proxy season – ISS
      Chicago Policemen plans search for index fund manager
      A pharmacist administers a dose of the COVID-19 vaccine in Mountain Brook, Ala., on Feb. 21, 2021
      Business optimism grows as vaccinations spread – Fed
    • Amanda Agati
      PNC chooses new CIO for asset management group
      Robert C. Doll
      Bob Doll to retire from Nuveen
      WisdomTree adds U.K. institutional sales director
      Bonaccord takes minority stake in Monroe Capital
    • Illinois pension fund liability jumps 19%
      Xerox to send $130 million to global pension plans
      Evergy to boost pension plans with $132 million contribution
      Occidental Petroleum to pour $170 million into pension plans
    • Amanda Agati
      PNC chooses new CIO for asset management group
      Robert C. Doll
      Bob Doll to retire from Nuveen
      WisdomTree adds U.K. institutional sales director
      Des Mac Intyre
      Channel Capital teams up with former Mellon CEO to launch incubator firm
    • The Charging Bull statue is covered in snow near the New York Stock Exchange on Feb. 11, 2021
      Bain: Private equity managers finish 2020 strong
      Carlyle secures $4.1 billion ESG-related credit facility
      Hamilton Lane raises $3.9 billion for fifth secondary fund
      PSG closes first Europe-focused fund at $1.5 billion
    • AEW chooses head of fund operations and debt finance
      Sebastiano Ferrante and Jocelyn de Verdelon
      PGIM Real Estate turns to staff to fill new roles
      European managers key in on specialist strategies
      Ingrid Jacobs
      Jones Lang LaSalle brings on head of diversity and inclusion
    • Neal and Brady
      Retirement security could be only issue both sides accept
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Shawn O'Brien
      Annuities coming to target-date funds, but not right away
      David Ireland
      Sponsors returning to questions about in-plan annuities
    • Charging Bull, sometimes referred to as the Wall Street Bull or the Bowling Green Bull, a bronze sculpture that stands on Broadway just north of Bowling Green in the Financial District of New York City
      Top-performing managers Q4 2020
      P&I 1,000 largest retirement plans: 2021
      Retirement in emerging markets
      Outlook 2021
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • Chicago Policemen plans search for index fund manager
      North Dakota builds on infrastructure investment with $200 million commitment
      Iowa Municipal Fire & Police reveals $95 million in commitments
      ACCESS pool chooses Minerva Analytics for ESG advice
    • Chicago Policemen plans search for index fund manager
      North Dakota builds on infrastructure investment with $200 million commitment
      Iowa Municipal Fire & Police reveals $95 million in commitments
      ACCESS pool chooses Minerva Analytics for ESG advice
    • Financial Auditing Services
      Actuarial Services
      Emerging Market Equity Manager Services
      Securitized Credit Manager Search
    • Taiwan Semiconductor’s No. 1 in the emerging markets book
      U.S. fixed-income returns post another positive year
      Nasdaq delivers an impressive year
      U.S. dollar's recent decline continues
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Tesla cartoon
      Don’t confuse wealth creation with retirement saving
      Top 1000 cartoon
      Top 1,000 retirement plans weather storm just fine
      Infrastructure cartoon
      You must go big on infrastructure, Mr. President
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
    • Investment Trends: Looking Ahead Across Equity Sectors
      Rethinking Market and Reference Data Management
      China is embarking on a new stage of growth
      Gold Outlook 2021
    • Sameer Shalaby
      Commentary: Why should investors care about treasury management?
      David Blitzstein
      Commentary: Without a national retirement policy, Americans face a future of pension crises
      Lawrence Cunningham
      Commentary: Gensler should keep Clayton’s pragmatic proxy adviser rules
      My-Linh Ngo
      Commentary: Pension funds and the role of the debt market in the fight against climate change
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • P&I Content Solutions
      How will gold react?
      To people shaking hands
      P&I Content Solutions
      Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
      Sponsored Content By MassMutual
      Leveraging Data to Manage Risk
      Sponsored Content By iShares
      ETFs are becoming a cornerstone of insurance equity portfolios
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      0:45
      Private funds weathered 2020 turmoil
      watch video
      0:59
      Secure choice and other retirement plans at a state level
      watch video
      3:33
      P&I 1,000 by the numbers 2021
      watch video
      1:33
      A look at hiring activity in 2020
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
    • POLL: Working after the pandemic
      POLL: The year ahead for the 1,000 largest U.S. retirement funds
      POLL: The Biden administration’s economic plans
      POLL: Retirement issues in 2021
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • By the Numbers for February 2021
      Top Performing Managers of U.S. Stock, 4th Quarter 2020
      Top Performing Managers of Domestic Balanced, 4th Quarter 2020
      Top Performing Managers of Domestic High-Yield Fixed Income, 4th Quarter 2020
  • Events
    • Conferences
    • Webinars
    • Defined Contribution Spring Virtual Series
      DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. Print
January 24, 1994 12:00 AM

IBM OFFERS WORKERS FINANCIAL ADVICE

By Christine Philip
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    ARMONK, N.Y. - IBM Corp. is breaking new ground by providing corporate-sponsored financial planning services for personal and retirement savings to its U.S. work force.

    Observers say IBM probably is the first major U.S. company to do so, as well as the first to allow external financial service firms access to its national work force with the purpose of providing specific investment advice on retirement and other savings vehicles.

    Such a move makes IBM the largest, and possibly the first, U.S. company to step over the boundary between educating employees to make the right investment choices in their defined contribution plan and providing investment advice through third-party financial planners.

    IBM, with defined benefit assets of $27.7 billion and an estimated $6.2 billion in defined contribution assets as of Sept. 30, implemented the program earlier this month.

    One component is advice from financial planners on investment choices within employee defined contribution plan accounts, where appropriate.

    IBM selected IDS Financial Services Inc., Minneapolis, and Merrill Lynch, Pierce, Fenner & Smith Inc., New York, as the service providers.

    Buck Consultants Inc., New York, assisted in developing the program, selecting the financial services firms and training IDS and Merrill Lynch representatives to provide a full picture of IBM's benefits and corporate culture.

    "It's clearly a new area, extremely new. IBM is on the cutting edge here," said Jeff Croyle, a partner at Kwasha Lipton, Fort Lee, N.J. "Everyone has identified a strong need for financial planning for participants, which includes strong modeling and projection of future retirement savings needs, as well as for personal savings goals. But so far, only a few large companies are seriously considering the provision of financial planning on an individual basis.

    "If this type of personal financial planning proves successful and encourages participants to save more and get more active in the 401(k) program, as well as for private savings goals, there will be a much bigger second wave of companies jumping to add the services."

    One of IBM's primary objectives is to encourage employees to start planning for retirement and other savings goals, such as college education funding, much earlier in their careers. IBM is seeking to move out of a paternalistic role and to encourage employees to take responsibility for retirement savings, and all personal financial matters.

    "Our goal is to promote understanding and appreciation of all of IBM's benefits and to provide employees with the support, the tools they need for financial planning on all levels, integrating all of our benefits," said Dianne Nalin, project leader in WFS Workforce Solutions, IBM's separate human resources company, based in Mt. Pleasant, N.Y.

    "We are also hoping to increase awareness of and participation in IBM's investment offerings - the 401(k) plan, the employee stock purchase plan, IBM Investments (mutual funds and CD products offered through IBM Credit Corp.) and our group insurance products. Our goal is to emphasize the shared responsibility for financial security, and by providing options for employees to take an active role in planning, we think we will be very successful."

    Both financial planning firms will provide free group employee education meetings and initial one-on-one consultations with a financial counselor.

    Employees may apply all or part of a $250 annual subsidy from IBM to obtain a personal financial report, which would contain customized objectives to meet savings goals for retirement, college funds, home down-payments and other needs. The price of the report would range from $140 to $400.

    All financial planning sessions must be initiated by the employee, and are customized to include IBM's benefit offerings. IDS and Merrill Lynch representatives are prohibited from marketing their products to participants within the context of the planning sessions or to make any direct contact with employees.

    However, Ms. Nalin acknowledged both companies are free to accept participant business once the written analysis has been performed.

    "Any business gained by either company from IBM employees is outside the scope of the personal financial planning program," said Ms. Nalin.

    IBM has been careful to word its benefits literature so as to remind participants that any decisions they make on the basis of their financial planning are entirely the responsibility of the participant.

    But some observers have strong reservations about allowing free access to employees by firms like IDS and Merrill Lynch, which have aggressive retail investment products for sale by financial planners with commissions riding on those sales.

    J. Michael Scarborough, president of Scarborough Group, Annapolis, Md., a provider of 401(k) advice and account management services directly to individual employees, said there is a potential for abuse of less sophisticated investors.

    "For many people, between 80% and 85% of their total net worth is tied up in their 401(k) plans. That's a real motherlode of money. Under the new IRS tax rules, effective Jan. 1, 1993, active employees have the option to move their defined contribution plan assets out of the plan into IRA roll-over accounts. One of these days, one of the personal financial planners involved in a situation like this is going to wake up and see that pot of money and get serious about moving some of it to his company's products. Do you think this won't happen? It will."

    IBM's Ms. Nalin countered, "We have extremely satisfied customers in the (401(k) plan). We are not worried at all about this type of occurrence. Our 401(k) plan is meeting the needs of participants extremely well."

    Other observers point to the trend of employers to offer more complete investment management services to employees, verging on advising participants about exactly where to invest retirement assets.

    Said Lou Valentino, director of the defined contribution practice at The Wyatt Co., New York: "In order to really help participants to plan for the future, you have to look at a broad spectrum of assets, not just retirement assets. You really need all the components of the puzzle together to determine proper asset allocations for the pension assets.

    "There's clearly a trend for employers to begin to step beyond just institutional investment issues to look at the total picture. There's a move afoot to provide advice, as well, not just education and suggestions, but it's so new, we can't be sure yet if it's a wave or a ripple. It's an upstart activity.

    "The real question is where the liability lands when advice is being given to participants on investment issues," said Mr. Valentino. "It sounds like IBM has put some distance in there, and you have to assume they've had full legal advice on the subject."

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    Gender diversity is improving on FTSE 350 boards
    Gender diversity is improving on FTSE 350 boards
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
    Sponsored Content: Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Rethinking Market and Reference Data Management
    Investment Trends: Looking Ahead Across Equity Sectors
    China is embarking on a new stage of growth
    Gold Outlook 2021
    Shifting DC Times - Winter 2021
    GP-LED OPPORTUNITIES AT THE SMALLER END OF THE MARKET
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center