Did anyone notice the new policy hidden in the fine print about the 401k matching?
33 replies (most recent on top)
There seems to be a lot of confusion in the discussion thread about how WF contributes to our 401k accounts. If you read the summary booklet, you'll see that they 1. match your contributions up to 6% of compensation (subject to IRS limit); 2. make a 1% base contribution for employees making less than $75K (new 1/1/2021 and don't have to contribute to get it), and 3. make a 'discretionary contribution' (used to be profit sharing) up to 4% depending on board approval for employees making less than $150K. There is NO compensation limit (other than what the IRS limits) on match. All three require vesting for new hires as of 1/1/2021. If you have more than 3 years of service, you own it all. With 20+ years at WF, I hope to retire well situated in a few years!!
@1fpq+1eb1vmSv - I disagree with your statement of "Expect to see that future employer contributions will require some amount of vesting" because the 401k has to work under the rules of the IRS so we have a level of protection. If they make changes then it has to be a change allowed within the IRS rules.
https://www.irs.gov/retirement-plans/issue-snapshot-vesting-schedules-for-matching-contributions
These minimum vesting schedules are the longest time periods, or most restrictive vesting rules, a plan can use to comply with the IRC Section 411(a)(2)(B) minimum vesting standards. A plan can have more generous terms that provide for faster vesting, including immediate vesting.
For everyone whose working here now, your 401k is 100% vested. It cannot become "unvested".
Your contributions are always yours. 100%.
However, changes can - and will - be made to future employer contributions. Expect to see that future employer contributions will require some amount of vesting.
@1gun+1eb1vmSv - I did. It says... Matching Contribution: No compensation limit (other than IRS limit).
If you search the hr support and service site for international year-end pay, you will find an article about year end pay guidance. While some of it is specific to international employees, some is for every location. When discussing eligibility for raises and such, you will see that 200k is specifically called out as the definition of high earner this year. Just go look up the article. Lots of other interesting info in there.
@1pbn+1eb1vmSv that only applies to the job family salary ranges published. Interesting thing about that - if any area's midpoint hits $200k, all area ranges are not published.
There are many area 000 that are $200k but area 001 and 002 are under. All are available only to managers or people in the title and not published for all.
Now that midpoints are a thing of the past I wonder if the overall ranges will be posted.
@1gun+1eb1vmSv you need to read the eligibility link in the 401k story from last week. Over $150k no 6% match, just the extra one the board votes on - if it votes yes.
I thought high earner definition was changed to 200k this year?
@1qis+1eb1vmSv - Reaching the $150k mark doesn't change your 6% match. That is not discretionary. However, if they do an unexpected extra discretionary contribution (not a match) such as giving everyone 1% or 2% extra then the 150k+ people miss out.
@1mus+1eb1vmSv - Right, as a new hire you can put in for yourself during that first year but no match for you. But at least you will be gaining a year of service. During year 2 they will match but that money doesn't reach your account until the end of the year and you actually don't even own that match (0% vested). At the end of year 3 you will then be 100% vested so you will own and get to keep any matching funds (in theory, 2 years worth at this point at the end of the year when they put it in again).
I would be a new hire after 1/1/2021, but cannot see how it impacts my 401k match, as the WF does not match at all for new hires in the first year.
Does anyone have clues?
Good news! You're comp has reached the $150k mark!
Bad news! Your discretionary 6% 401k match is gone and we upped your health insurance premiums! Not because you're unhealthy but because you have so much more to spend! Oh, and we'll not give you a merit for 2020, you make plenty! 2021? Who knows?? Fun, right? Keep ya guessing!
Depends on where you live. That said, there shouldn't be different rules for different income levels. If you don't like paying the "high income" people so much, just slow wage growth and hiring pay level and you'll get there.
Earth to @wyj+1eb1vmSv…
Are you even responding to the same thread?
OP here…
Thanks, I did not get that from the short statement on the site which only indicates matching will vest over 3 years and does not reference you are good to go after the first 3. I conflated it with the bonus vesting.
Luckily this forum is supposedly anonymous so I can still pretend I don’t make mistakes.
And the whole if u make more than 150k you don’t get any discretionary match. I’m sorry 150k per year is not highly compensated.
Lesson: How 401k vesting works
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-vesting
You effectively have two account... EMPLOYEE (your contributions) and EMPLOYER (matching contributions)
We have cliff vesting for the EMPLOYER account and are entitled to 0% of the EMPLOYER account until you reach 3 YEARS OF SERVICE and then from that point on you get 100% of that account. Once you are 100% vested then this is a non-topic. For example, the match they put in at the end of year 4 is 100% as soon as they put it in (the clock isn't based on when they put it in... it is based on your years of service).
The money in your EMPLOYEE account is 100% yours (vested) from all the time (no years of service requirement).
Obviously, this approach to a 401k is to "encourage" employees to stay for a minimum years of service.
Note: A company that grants stock awards will likely have those tied to a vesting schedule from the date of the award rather than your years of service. By granting you new awards each year with a vesting schedule then you will always have a hard choice to make of leaving money on the table if you leave (i.e. golden handcuffs)
"all future annual matching contributions will vest over 3 years"
Would this be unprecedented?
There were a lot of people that said
1- I have been 100% telecommute for a decade, they could never make me return to the office
2- the target percent for my job is part of my compensation, that was part of my offer
3-our 401k match is quarterly
4- feel free to fill in the blank
Many things change. And the trend here is improving the bottom line at the expense of employees. I’m willing to wager on this anonymous forum that within 2 years, there will be an announcement that “for competitive reasons and to be fair to the employees hired after 1/1/21, all future annual matching contributions will vest over 3 years”
If you haven’t learned yet, never bet against management being anti-employee
Once you are vested in match and other employer contributions, you are always vested. Vesting only applies to new hires 1/1/2021 and WF cannot apply that retroactively. You're all upset over nothing.
Keep calm and save on....regarding vesting in employer contributions in the WF 401(k) Plan, my buddies in HR tell me that prior to 2010, the legacy WF plan was a nonsafe harbor plan and match was subject to a vesting schedule. With the WF and Wachovia merger, the 401(k) Plan became a safe harbor plan and vesting on match was immediate. With the plan design changes made 1/1/2021, only new hires hired 1/1/2021 or after are subject to the 3-year vesting on match. Anyone employed by 12/31/2020 remains 100% vested in match. Not sure what you are seeing in "fine print" - the information has been available all year on teamworks and in the summary plan description booklet and was announced by email, and included in the transition microsite when the plan moved to Empower. Read and keep saving so you can retire someday comfortably.
The company is really going to sh*t in many ways -- especially in compensation. Every year they take things away and some things are more expensive (like medical). I'm just biding my time long enough to collect on my 401k and go do something else (or get a package). I'll still do my job, but I'm not going to ki-l my self for a company that cares less and less about it's employees.
But wait there's more. Last year they did away with company paid phones. Ok, so now I'm faced with using a personal phone for email and calendar functions or do w/out. There is/was also talk that they'd do away with company computers. Yes, they will expect some people to buy their own equipment to do company business.
That said -- how else do you think they can deal with the financial aspects of all these fines and limitations b/c the leadership can't get all the issue fixed? The easy way to save money is to hit compensation and benefits.
It has been 100% vest for the 10 or so years I’ve been here. YMMV
Is this about the 3-year vesting? I'm almost 20 years in here at the bank, and if I recall that's the policy when I started. Am I mistaken, or did it change at some point? I've not stayed on top of the policies for new hires.
The ridiculous part about the 3 year vest, is the best case scenario is saving money over the first 2 years. By year 3, your annual 401k match is whole’ish. The only reason to do this is to create a mental blockade to keep employees from leaving. And trying to discourage employees from leaving by withholding money they have already earned, will probably not result in a happy, productive workforce. But I guess if your goal is short term improvement of net income, then why would you try to keep your workforce happy and productive.
What linked page, I don't see any link, can someone share what the heck we're talking about please, spending 30 minutes in teamworks is getting me no where...thank you
OP, is it about 3 years vesting?
I am so puzzled why would anybody would be exited to starry working here at WF? It looks like benefits that they are reinventing are so unattractive. I can only understand new grads who are joining WF as their first real job or people who do not have luck getting into any other place (for whatever reason). Even for new grads, there are so many places now that looking for people... why this 30-years-behind-the-progress place?? And now they want to entice people to stay here with 3 years vesting for 401k, bonuses that are partially paid in stock that is a joke vested over 3or 4 years.... who are those masses that want this (beside the company it self)
Thanks for pointing this out, I guess anyone that started after 1/1/21 knows about it, but this is the first time I have heard about it. There is no way they don’t make it enterprise wide soon, maybe even by next year. To be fair to the new hires of course.
Linked page, it isn’t even really fine print, it’s just not bolder or anything even though it is a huge change. I guess hoping no one notices.
Where is the fine print? In the e-mail, or on the linked page?
Ha, saw that too. In a year or so, it will be rolled out to everyone with the announcement of making it fair and consistent for all employees and consistent with the bonuses over 50.
OP here, talking about the new hire thing, I don’t know what FFS person is talking about, but I haven’t seen or heard a whisper of this anywhere, my question is how long until this hits everyone.
What is the OP talking about? The annual matching or the part only for new hires?
FFS - how many times can someone start this same conversation?