Speculation is that it’s beneficial to IBM because the money will be under their management rather than Fidelity’s. What exactly they’re allowed to do with that money, I’m unsure.
Pension funds are carefully regulated and cannot be in risky investments. IBM cannot invest in IBM, they have to invest in various bonds. Before pension regulations a few pensions invested in the.company and employees discovered that was a bad idea when the company went bankrupt just before they were set to retire and their pension value went to zero.
I'm not sure if this is legally a pension, if not assume it is worth nothing. If it is the US government backs it and so if you work for IBM for 30 it is a great deal, pensions are defined income so you don't have to worry about if you will live to 66 or 120. (If like most you switch jobs it is terrible)
Pension funds invest in risky assets, just at a lower percentage than say a hedge fund with accredited investor status. The Ontario Teachers Pension Plan lost $100m to the FTX bandits last year.
Legally, I believe this is a pension fund. Still, they have to be pocketing the difference somewhere because why else would they make such a controversial decision that also increases administrative overhead?
bluGill|2 years ago
I'm not sure if this is legally a pension, if not assume it is worth nothing. If it is the US government backs it and so if you work for IBM for 30 it is a great deal, pensions are defined income so you don't have to worry about if you will live to 66 or 120. (If like most you switch jobs it is terrible)
rchaud|2 years ago
https://www.ft.com/content/29c67711-377c-4435-9c90-280852374...
lisplist|2 years ago
pyuser583|2 years ago
401ks are a separate thing entirely. Generally they don’t let you invest in individual stocks at all.
onlyrealcuzzo|2 years ago