A friend of mine works for a company that changed how they flow employee contributions into their 401(k)s.
Originally - and like every other company I know of - when an employee made a contribution to their 401(k) (through their paycheck) it went directly into the 401(k) assets.
This company changed the "flow" of that money. Now, the money first goes into a company stock fund and then a transaction is immediately made, converting that into cash which then goes into the 401(k) assets. (the only case where that immediate transaction doesn't take place is with money buying company stock into their 401(k)).
Why would they do that?
It seems like this may result in increased volume of transactions of the company stock but other than that, why funnel 401(k) contributions through the company stock fund? What benefit is it to the company?
[Additional information: No action was needed to keep investing in the assets you already were contributing to. In other words, if you did nothing, you still were investing in the same stuff you were before. This wasn't a sneaky way to get lazy/inattentive people to put their money into the company stock.]
Submitted December 07, 2018 at 08:30AM by davechri https://ift.tt/2zLNVHy
