News outlets reported that the company blamed the law and the health costs of two "distressed babies" for a significant change in how it matches 401(k) contributions.
The Washington Post: AOL Chief Reverses Changes To 401(k) Policy After A Week Of Bad Publicity
AOL chief executive Tim Armstrong e-mailed employees Saturday evening that he was reversing the company's 401(k) policy and apologized for his controversial comments last week. "The leadership team and I listened to your feedback over the last week," wrote Armstrong in his e-mail to the company. "... we have decided to change the policy back to a per-pay-period matching contribution." The decision came after days of pressure on the company, after many employees were angered by a report by The Washington Post that retirement benefits were being changed (Yang, 2/8).
Capital New York: AOL Reverses Decision On 401(k) Matching After Outcry
That decision started to gain notoriety as Armstrong made television appearances linking the decision to Obamacare and, later, in a staff-wide conference-call meeting, mentioning two employees' difficult pregnancies and neonatal care needs as having cost the company too much money, requiring the adjustment. ... Read the memo reversing the 401(k) decision below: ... "On a personal note, I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific healthcare examples in trying to explain our decision making process around our employee benefit programs" (Pompeo, 2/8).
Reuters: Backlash Hits AOL CEO After 'Distressed Babies' Remark
Armstrong's comments on Thursday during a company town hall meeting about why it was cutting 401(k) contributions ... After the town hall, Armstrong sought to clarify his remarks in a memo to AOL's 5,000 employees. "I discussed the increases we and many other companies are seeing in healthcare costs," he wrote. "In that context, I mentioned high-risk pregnancy as just one of many examples of how our company supports families when they are in need. We will continue supporting members of the AOL family" (Saba and Richwine, 2/7).
USA Today: Reports: AOL Reverses Position On Year-End 401(k) Match
A year-end lump sum 401(k) match from your employer has a nice ring to it --unless you change jobs earlier in the year. Employees that exit a company before year-end could lose out on the cherished corporate match, a key pillar of 401(k) savings plans ... Armstrong had told CNBC the year-end strategy was to offset higher costs related to the new Affordable Care Act (Shell, 2/8).
