Author Topic: Tech Companies Sans 401K  (Read 3382 times)

VillageIdiot

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Tech Companies Sans 401K
« on: August 01, 2014, 09:43:05 PM »
My wife works for a very large tech company, I'm not going to identify it for career safety reasons. They have a stupid amount of perks for employees. Catered breakfasts and lunches, enough branded t-shirts to avoid having to buy any tops for the entire summer (which we are actually doing), open tabs at the nearby coffee shops, and salaries that are honestly probably a bit too high for how little profit the company makes.

Yet they don't offer a 401K. No, it's not that they don't have match on their 401K, there is no 401K program at all. Instead they have a very generous ESPP and grants, but people look at you funny if they find out you dumped any stock at all.

My best guess is that this company figured out that if they offer you a 401K, you're more likely to retire at some point, rather than working you forever. Sad, really.

slugline

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Re: Tech Companies Sans 401K
« Reply #1 on: August 02, 2014, 06:39:34 AM »
So now comes the part where you reveal that it's not an American company and they call the retirement plan something else overseas? Because otherwise this is facepalm material. Surely someone has posed the question to HR already, right?

AH013

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Re: Tech Companies Sans 401K
« Reply #2 on: August 04, 2014, 10:41:44 AM »
Smart move on the company's part.  401ks can be expensive to operate even without a match, both in cost and time for the CFO/fiduciary.  Their employee base is probably mostly a bunch of 20-somethings, and retirement is like forever away that employees don't even have to worry about saving for it until they found their own startup in their 30s, and then start saving for retirement in their 40s/50s.

All joking aside, most very young employees don't appreciate a retirement plan, as measured by contributions, which increases the cost for everyone.  And those highly compensated older employees that would save can be offered a specialized retirement plan only available to them to provide value to them.  Better to use fringe benefits dollars for things the majority of their employees will care about, like branded swag & coffee.

gimp

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Re: Tech Companies Sans 401K
« Reply #3 on: August 04, 2014, 02:23:02 PM »
It's not that they expect people to work forever. On the contrary. Certain tech companies have very good salary and poor benefits because they want fresh talent, who don't care about the benefits anyways, but very much care about the salary. The fresh talent turns ripe, then leaves before it gets over-ripe, often to a startup or to somewhere with benefits.

I honestly prefer that over the one where the company has great benefits but pays 35% less.

Beric01

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Re: Tech Companies Sans 401K
« Reply #4 on: August 04, 2014, 06:26:38 PM »
It's not that they expect people to work forever. On the contrary. Certain tech companies have very good salary and poor benefits because they want fresh talent, who don't care about the benefits anyways, but very much care about the salary. The fresh talent turns ripe, then leaves before it gets over-ripe, often to a startup or to somewhere with benefits.

I honestly prefer that over the one where the company has great benefits but pays 35% less.

Fully agree. Even as a Mustachian, the vast majority of my company's benefits are useless to me. I max out my 401K and I collect my commuter bonus for using a bicycle to work. My company actually pays me NOT to enroll in their health plan (I'm on my parents' until age 26), when I may just try to go without. I know they're saving money by having me not enrolled.

And yet there's so many benefits that are rigged to help married people with kids. The game is rigged!
  • health plans: you get way more out of it for your money if you're covering a spouse and kid
  • family/medical leave: again, for kids/spouse
  • solar power installation discount - useless for me as a single renter.

All of these (and more I didn't bother to list) are essentially benefits I'm not collecting because I don't fit into the idea of a married with kids suburban homeowner. And that comes right out of my paycheck.

LalsConstant

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Re: Tech Companies Sans 401K
« Reply #5 on: August 04, 2014, 10:26:32 PM »
Fully agree. Even as a Mustachian, the vast majority of my company's benefits are useless to me. I max out my 401K and I collect my commuter bonus for using a bicycle to work. My company actually pays me NOT to enroll in their health plan (I'm on my parents' until age 26), when I may just try to go without. I know they're saving money by having me not enrolled.

And yet there's so many benefits that are rigged to help married people with kids. The game is rigged!
  • health plans: you get way more out of it for your money if you're covering a spouse and kid
  • family/medical leave: again, for kids/spouse
  • solar power installation discount - useless for me as a single renter.

All of these (and more I didn't bother to list) are essentially benefits I'm not collecting because I don't fit into the idea of a married with kids suburban homeowner. And that comes right out of my paycheck.

It never gets better.  Maternity leave, paternity leave, birth control medications are all being supplemented from your pocket, and even if you do get on the insurance plan, you're sharing risk with people who have six year olds, and they are paying far less per capita than you are.

Best to just shrug and laugh it off and count yourself lucky you're insured at all, because that's all there is for it.

It's not intentional malice, very few things in this world are, it's more like the people who make the decisions how to structure these things are able to price discriminate, so they do.