IBM’s 401(k) to Pension Shift Is Hard Act to Follow for Plans

IBM‘s unexpected move to shift its corporate workers from a 40-year-old 401(k) to a cash-balance pension has piqued the interest of other corporate plan sponsors, but it’s highly unlikely to herald in a revival of traditional defined benefit plans in 2024.

The multinational software company—historically a Big Tech leader in corporate benefit adjustments—started off the new year by dusting off its old, frozen cash-balance pension plan and enrolling tens of thousands of 401(k) participants. Instead of matching contributions, the company will fund a salary-adjusted 5% credit per worker in its new “Retirement Benefits Account.”

Big Blue stands to save ...