IBM plans to end 5% matching contributions to employees’ 401(k) accounts in favor of an automatic 5% retirement benefit provided to all employees, starting January 1, 2024, a company spokesperson confirmed by email.

The technology corporation will still allow employees to make deferrals into a 401(k), but it will direct 5% of each employee’s salary into what it terms a “Retirement Benefit Account,” according to a spokesperson and details from a company memo posted to a conversation on the web site Reddit.

IBM planning to end the employer match is uncommon, says Rob Massa, managing director and Houston operations retirement practice leader at Qualified Plan Advisors.

“The U.S. [private] retirement [system] is a voluntary one and, as long as a plan sponsor follows the law and IRS/[Department of Labor] regulations and administers the plan in accordance with its plan document, they may make any plan design settlor (i.e., non-fiduciary) decisions in any way they prefer,” he says. “The decision to eliminate the match is legally acceptable, and there is no fiduciary liability associated with it.”