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Saving for retirement

With its automatic company contributions, dollar-for-dollar company match, broad array of investment options and special features, IBM's 401(k) Plus Plan is an innovative, flexible resource you can use to meet your financial and retirement goals.

IBM MoneySmart
IBM MoneySmart, the company's comprehensive financial education and planning program, offers you a highly personalized experience. Every employee — from novice investor to the most savvy — should find something of value in the program's offerings.

IBM also offers a stock purchase plan that enables eligible employees to purchase IBM stock at a discount.

401(k) Plus Plan
The 401(k) Plus Plan lets you defer up to 80% of your eligible compensation on a before-tax or Roth 401(k) basis (up to limits set by the IRS). You can also save up to 10% of your eligible pay on an after-tax basis. For regular full-time and part-time employees hired or rehired after January 1, 2005, IBM offers a 1% automatic company contribution and a dollar-for-dollar company match on up to 5% of eligible pay. Employees become eligible for IBM contributions after completing one year of IBM service. IBM contributions are immediately vested.

Note: Long-term supplemental employees are not eligible to receive automatic company contributions or the dollar-for-dollar company match.

The Plan offers significant investment flexibility, with 32 investment options, including pre-mixed investment portfolios for different risk/return preferences, mix-and-match options for those who prefer to customize their own investment portfolios, plus access to nearly 200 commercially available mutual funds.

You can enroll in the IBM 401(k) Plus Plan on your first day of work. If you do not take any action, however, after 30 days of service, you will be automatically enrolled in the Plan at a 5% savings rate. You can change your savings rate or investment choices at any time.

The 401(k) Plus Plan also offers income-protection features that help you continue building retirement benefits in case of disability, and lets you convert your 401(k) benefit to lifetime payments in the future when you retire.

The Plan also features a loan provision which allows you to borrow up to 50% of your IBM 401(k) Plus Plan balance, up to a maximum of $50,000. You repay the loan through payroll deductions that are deposited directly to your account. You may also withdraw funds from your account in case of extreme financial hardship, as defined by the IRS.

You may withdraw funds from your IBM 401(k) Plus Plan if you become disabled or leave IBM. If your account balance is more than $1,000 at the time you become disabled or leave IBM, you may take an immediate lump sum distribution, begin annual installments, roll over all or part of your balance to an IRA or other qualified plan, or defer distribution. If you are age 55 or older in the year you retire from or leave IBM, you can generally receive your final distribution without incurring an early distribution penalty. The plan also permits active employees to withdraw funds without penalty after reaching age 59½.

IBM MoneySmart
IBM MoneySmart helps IBMers build personal financial security. In addition to guidance on topics like retirement planning, saving for college and debt management, MoneySmart provides personalized, one-on-one financial coaching, along with a robust online portal featuring a range of financial planning resources and tools.

Employees Stock Purchase Plan
IBM's Employees Stock Purchase Plan (ESPP) offers eligible employees the opportunity to invest in IBM stock at a 5% discount off the market price on the date of purchase each pay period. Participation is voluntary. In general, employees may designate between 1% and 10% of pay, up to a maximum of U.S. $25,000 worth of shares in a calendar year.

A per-offering limit on total ESPP share purchases helps IBM manage the rate of share consumption and more closely align the ESPP with shareholder interests.

As a general rule, active, regular full-time and part-time employees of IBM or any of its eligible subsidiaries may participate in the ESPP at the beginning of the offering period following their date of hire. Supplemental employees are eligible to participate once they have worked at least 21 weeks in the calendar year of the offering, and have worked at least 20 hours per week 75% of the time. Typically, the offering periods are six months and start on January 1 and July 1 of each year.

Eligible employees may join the ESPP at any time during the offering period, as long as they are actively employed and on the IBM payroll on the first day of the offering period. Participants may also increase or decrease their ESPP contributions, add or delete a joint owner, or withdraw from the ESPP at any time.