AOL Changes Mind About 401(k) Match Change

February 10, 2014 ( – Last week, AOL announced it was changing the timing of employer matching contributions for its 401(k) retirement plan.

AOL’s Chief Executive Officer Tim Armstrong confirmed in an interview with CNBC that 2014 would mark a switch from the existing per-paycheck contribution schedule to a lump sum at year’s end, meaning employees would have be active (i.e., still employed) with AOL on December 31 in order to be eligible for the employer match.

Armstrong cited the potential cost increases due to the Patient Protection and Affordable Care Act (ACA). “We have to look at our benefits program very seriously,” said Armstrong in his February 6 interview. “Obamacare [the ACA] is an additional $7.1 million expense for us as a company. So we have to decide whether to pass that expense along to our employees or cut other benefits.” 

Most news reports following the announcement were negative.

So, Armstrong, and AOL, had a change of heart. In an email memo to employees, obtained by the Washington Post, Armstrong said, “The leadership team and I listened to your feedback over the last week. We heard you on this topic. And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution.”