As of 2024–2025, IBM has shifted from a traditional 401(k) employer match to a new structure called the Retirement Benefit Account (RBA). Here’s the latest breakdown:
1. Retirement Benefit Account (RBA): What You Need to Know
IBM no longer contributes a 5% match (plus 1%) to your 401(k). Instead, eligible employees receive a monthly credit equal to 5% of their eligible pay into an RBA, a cash-balance–style account within IBM’s Personal Pension Plan. No employee contribution is required to receive this benefit.
2. Guaranteed Growth for a Changing Economy
- IBM guarantees a 6% annual return through 2026.
- Starting in 2027 and going through 2033, the RBA grows at the 10-year U.S. Treasury yield, with a minimum of 3%.
This structure provides predictable, low-risk growth, unlike your self-directed 401(k).
3. RBA vs. Traditional 401(k) Match: What Changed?
Until 2024, IBM’s retirement benefit was primarily delivered through a traditional 401(k) match. Starting in 2024, IBM replaced the match with contributions to the Retirement Benefit Account (RBA). Here’s how the shift looks:
- Employer Match
- Before 2024: 1% automatic + up to 5% matching contributions.
- Now: No direct 401(k) match.
- RBA Contribution
- Before 2024: Not applicable.
- Now: 5% of salary contributed monthly by IBM.
- Growth Rate
- Before 2024: Market-based growth (you controlled investments).
- Now: Guaranteed 6% annual growth for the first three years, then tied to Treasury rates with a minimum 3% floor.
- Employee Control
- Before 2024: You chose your investments inside the 401(k).
- Now: RBA funds are not investable until you separate from IBM.
The RBA functions like a blended defined-benefit and defined-contribution plan. It’s immediately vested and portable, but offers limited upside compared to market returns.
4. What Every Employee Should Consider
- You still control your own 401(k) investments. The RBA does not replace your ability to invest, it’s an additional guaranteed contribution.
- RBA is not investable, and cannot be accessed until you leave IBM (or retire). It’s designed as a safe anchor rather than a major growth vehicle.
5. How the RBA Compares: Pros & Cons
Pros:
- Guaranteed minimum return (6% through 2026, then Treasury rate optimization)
- Immediate vesting & portability
- No employee contribution required
Cons:
- Low growth vs. market potential
- No investment control
- Limited liquidity (can’t access until separation)
- Does not compensate fully for old 6% 401(k) match, especially for long-term compounding
IBM Benefits Summary (Updated)
RBA (Retirement Benefit Account)
- 5% of salary credited monthly
- 6% fixed growth through 2026
- Tied to Treasury rate thereafter (minimum 3%)
- No market risk
- Portable if you leave IBM
401(k)
- Self-directed investing
- No employer match
- Contributions can be pre-tax, Roth, or after-tax
- Flexible fund options
ESPP / Pension / Other Perks
- Employee Stock Purchase Plan (ESPP)
- Cash Balance Pension
- Health benefits (HSA/FSA)
- Student aid/tuition support
- Hybrid work options
Final Thoughts
The RBA won’t be the driver of major wealth growth in retirement, but it’s a guaranteed, low-risk piece of your overall benefits puzzle. Ignoring it altogether means missing out on money IBM is setting aside for you each year.
👉 If you’re an IBM employee, it’s worth reviewing how the RBA, 401(k), and equity compensation fit within your retirement strategy. If you’d like help making the most of these benefits, let’s connect and build a plan around them.
Complimentary review of your portfolio here:
https://platinumpointfin.com/#86c8dd0a-5316-4424-9d5d-a617680686c0
Securities and investment advisory services offered through LPL Enterprise, a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
LPL Enterprise and LPL Financial are not affiliated with Platinum Point Financial.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
Charlie Burguieres, CFP®
Platinum Point Financial
