Layoffs and Personal Finance

A reader sent along a note about some of the recent layoffs we've been seeing across pharma/biotech companies. Different organizations have very different ways of handling things like stock units and options, and in a layoff one of the key variables is the vesting schedule. Remember, if you have compensation of this sort that hasn't vested, it isn't yours. It may show up in your statements (albeit under its own category), and you will have seen the announcements of it being awarded to you, but until this stuff vests that's all provisional. I think that most people realize that part, although if you don't, it's going to come as a nasty surprise. What seems to have taken some people unaware recently, though, is that companies have different schedules for vesting the employer match contributions in 401(k) accounts. Some companies vest immediately, but those are probably not a majority. The rest follow different schedules, and if you are laid off, that unvested money is going to disappear unless the company specifically changes its mind about that. Now that said, there's not much you can do about this, but it's worth knowing the real situation in advance so you can plan accordingly. Seeing money disappear from their retirement accounts was something of a shock to people in these recent layoffs, from what I'm told, making a bit situation just that much more painful.
Source: In the Pipeline - Category: Chemists Tags: Business and Markets Source Type: blogs