Thread regarding Wells Fargo & Co. layoffs

This is going on in other industries as well. Honeywell moved to matching after year-end several years ago.

@dhg+1kdncCkT "dollar cost averaging makes a huge difference to those of us who earn a paltry sum"
I don't like the end of year match at all but that entire argument is invalid. HUGE difference? 6% match, "Paltry Sum" lets guess and say you mean under $100k. If not being able to DCA $6k is breaking your financial future and freedom you need to go back and revamp your investment strategy. Every piece of financial literature out there that extols the virtues of DCA is appealing to the mental and emotional safety aspect of investing. Every true study (not op ed pieces) I have seen reflects DCA as neutral, not a holy grail but not a terrible idea. Simply a choice that is as likely to be successful or unsuccessful as Lump Sum'ing it. And making statements like "go back and look at X on Y date", past performance is not a guarantee of future returns. No one had any idea in 2019 what the Markets would look like today so it is a fools task to play that game. Perhaps 30 Dec the market will tank, 31 Dec you will get your match and then 1 June the DOW will be up 4k.

Assuming under 50 or not making the over 50 catch up contrib's you're already DCAing $20.5k/yr (for 2022), so potentially ~23% of your contributions are being lump summed at the end of the year. If you're truly concerned about missing out go make a singular lump sump contrib to a Taxable account on 1Jan of any year and consider yourself fronting loading the match for that current year and now you're ahead of the game (or DCA it, whatever you like). But 77% DCA through employee bi-weekly contribs with a 23% lump match sounds like you're diversifying your options to me and for the worried investor that should be a good thing.

You could make the argument of having that match out of the market as being an impact and that I would totally agree with. But again, one years match being out of the market is likely statistically insignificant to your entire portfolio. When you look at HCE's, 6% match, general investing malaise, etc, I'd be surprised if anyone was able to get $12k end of year lump. And again, even then I would expect their existing portfolio to make that $12k amount to 1% or less. I'm not super star and my match won't even reach a full percentage point of my overall portfolio.

I would say that they are playing follow the leader, but there are no leaders, just greedy scumbags. Whatever the a-holes at JPM decide is what Charlie Shart copies.

Wells Fargo was very sneaky about making the change from quarterly match to annual match. They wrote up an announcement that said, in big letters, Wells Fargo is such a swell organization that we're going to give all you saps that make less than $70K a year an automatic 1% or something. Big letters - we are so great and diverse here and we care about the poor folks. Then in tiny fine print they put "and oh, yeah... by the way... you will only get your 401K match once a year and only if we don't can your sorry a$$ or F with your performance review and run you off before December 15th. And now, apparently, you can't quit so that you leave on the 15th... now you have to quit at the end of the year to get the paltry few bucks in the match.

It used to be matched quarterly; they changed it to annually; 100% matching contribution up to 6% of salary. I have learned that MUFG also does an annual match. Also for bonus eligible exempt employees, the first $50,000 is cash; anything over that is restricted shares that vest over 3 or 4 years, something like that.

To follow up... its 6% at Wells Fargo paid match IF you survive till December 15th of any given year. You quit or get the boot and are gone on December 14th? Too Bad! No match. What the millionaires who run Wells Fargo fail to understand is that dollar cost averaging makes a huge difference to those of us who earn a paltry sum and are not millionaires.. so a match every quarter - like it used to be - was a little more beneficial than once on Dec 15. Because, go look at what the DOW and S & P 500 and WFC stock were on December 15th and go look at what they are now.... and tomorrow, and next week. The match was immediately worth less than when it was added to your account.

Thanks for responding everyone, very helpful.

This is NOT common practice but appears that financial organizations run by out of touch millionaires are making it so.

This is a recent change at WF. Employees do not like it and many have left due to this and changes in bonus structure. Bonuses over a certain amount now include stock that is earned over time. If you leave, you lose the stock(restricted share rights). The once a year 401k contribution exposes an employee to the value of stock on one particular day of the year and earn nothing for it during tge year. Mind you, WF makes billions. It is not yet an industry standard.

End of year. 6%