Stripe clawed back pension contributions after staff cuts(businesspost.ie) |
Stripe clawed back pension contributions after staff cuts(businesspost.ie) |
Framing it as "clawing back" pension contributions is disingenuous (IMO). Stripe applied its stated pension plan policy. It would have been news if Stripe had deviated from its policy.
It is odd that Stripe is the only one who is criticized for it...
I don't see any reason for this article to exist other than to try to "shame" Stripe for doing what many other companies also do.
But...I'm curious what level of disclosure you feel is required beyond saying you work at the company? Personally I don't want to read a bunch of legalese on HN posts. There are enough critical minds here that chicanery gets ferreted out pretty quickly. In this case, there are also multiple posts from others saying that Stripe's practice is if not ubiquitous at least common in Ireland, hence unsurprising to those who work there.
edit: typo
This is why I'm so wary of "tech press" news like this. Having a vesting schedule for employer contributions is pretty standard for a lot of countries, not just Ireland. So this has been going on for literally decades, all across the world, but it's only when a tech company does it that it is framed as "clawing back pension contributions".
I'm not saying this doesn't suck for employees or shouldn't be legally changed, but why are people OK with this practice for literally decades until a tech unicorn does it?
In the U.S. (I'm not familar with Ireland), vested benefits, whether defined or contributed, cannot be "clawed back". But unvested ones can, that's what "unvested" means.
Please do not assume default = USA.
Why shouldn't this very relevant context be in the title?
I discovered today that stripe is half based in Ireland. It would add valuable context to say which of its two countries this story refers to, since it involves country specific pension setups.
This article is completely misleading.
In Ireland, if you leave your employment before the 2 year mark, you can lose your employers' contributions. Not the ones you have voluntarily put in.
This is pretty standard here (at least as far as tech companies go). It's literally written in the freaking contract.
It sucks, but we all read our contracts when we signed.
The reason I can see an employer doing this is to serve as a retention mechanism. But it obviously doesn't work when people get laid off.
I now consider Stripe to be a gonif company.
The package was more generous than it had to be. The founders took responsibility and were transparent about the business. It was handled reasonably.
I would work at Stripe again.
Depending on employees age, length of employment 16 weeks can be an extremely low amount and the courts could get a higher settlement.
https://www.citizensinformation.ie/en/employment/unemploymen...
Every company has this as standard, but a lot have waived it for redundancies, so let's not let stripe off the hook.
There is an argument where Stripe should have gone above and beyond. But maybe Google/apple/ Microsoft who are 100x richer (maybe) than Stripe should have spearheaded that first.
> The pension clawbacks, which are legally permitted under Irish pension rules, only applied to staff who had been working with the company for less than two years.
If you got a mortgage when interest rates were low and now the bank comes knocking at your door to get you to pay more that wouldn't be reasonable.
There's always a risk. The problem is a half-ass article that tries to portray a company as being bad for following the agreement we as employees accept to work there.
IMO the best solution (from an employee protection PoV) would be for Ireland to ban these clauses. But I doubt all of the tech companies that actually bring money to this country would be happy with that. It's already a small country with a tiny talent pool. Most companies are just here due to the low corporate tax. If the government starts tightening things with regulation I have no idea why companies would stay here. The country has nothing to offer.
Like Amazon has a 3 year vesting period for 401k matches. If you leave before then, you lose all the matched funds but keep your direct contributions.
Not sure why this is news other than trying ride the “big tech bad” viewpoint.
Edit: just looked it up and it is three years. Brutal. https://www.amazon.jobs/cs/landing_pages/benefitsoverview-us
1. You may put an age related maximum percentage of your income into the pension fund (10% up to 30 years, 5% increase every 5 years thereafter). This is invested by a registered pension fund on your behalf. It is exempt from capital gains tax, deemed disposal on index funds, or other types of taxes that normally apply to investments.
2. Your employer may match an amount up to your contribution. Most employers in the tech sector will offer between matching the first 5% to first 10%. While this is income from your employer, to you, it is not considered for income tax purposes.
3. You are normally not allowed withdraw any of this prior to age 50.
4. _However_, if you leave a job with an employer managed pension within 2 years, you can instead refund your entire contributions and either keep them or invest them in your new pension scheme. This is to avoid people having to manage N number of pension schemes from however many former employers. If you choose to do this however, the tax-free status of the employer contributions vanishes. So they get refunded to your employer, and if your employer wanted to give them direct to you, that would be taxable income. Most employers won't want to bother with the paperwork for this.
5. When you draw down your pension, you may pay income tax on the payouts if your pension payouts exceed the tax-free cutoff.
What happens if you leave in 3 years? Is it a 2-year window that vests or once vested forever vested?
> Stripe cut around 90 jobs from its Dublin office as part of a wider restructuring of its global operations, which saw it reduce its overall workforce by 14 per cent from 8,000 employees down to around 7,000 today.
> The pension clawbacks, which are legally permitted under Irish pension rules, only applied to staff who had been working with the company for less than two years.
2. They talked through their decision making process in hiring at the rate Stripe did, then what changed that made them do layoffs. They were very direct that this was their choices and they owned them.
I don’t need them to weirdly punish themselves. They made a bet. They were wrong about the future. That’s fine.
I got 14 weeks which is a really long time.
If we are talking Ireland, as others have said the law appears to be exactly this.
Shit happens. They made a bet based on the information that they had at the time (in this case that COVID moving commerce hugely online would be a permanent shift, when it wasn't (or at least not as large.)) They mis-predicted the future and then had to respond.
I understand why they made the bet they did (and mostly agree.) I understand why they then decided to do layoffs (and mostly agree.)
They didn't blame anyone else or try to sidestep the difficult conversations.
It’s more in line with “traditional” companies. Amazon is going more down the IBM route everyday. For any Amazonians, it’s day 2.
https://www.cnbc.com/amp/2021/06/17/most-workers-wait-years-...
(But yes also had 1-2 jobs that the match had a vesting period)
I wonder if it's more common outside of tech?
Yes, it's all a mass conspiracy!! https://news.ycombinator.com/user?id=hn_throwaway_99
It should be a story with real consequences for the company if anybody’s pension is yanked.
If you are a professional PR/spin person for the company, you should definitely disclose.
If you're curious as to what I work on, I work on product updates via Stripe's owned channels, user issues, and other community-related efforts. I'm always contactable here (hnusername@stripe.com) or on Twitter (linked in my bio).
I'm also very happy to correct the record when misleading articles (or articles without necessary context) are published by the media.
Speaking plainly and truthfully about issues like this is critical to earn trust so "spinning" news would be contrary to everything I work so hard on.
Your LinkedIn, in stark contrast to your profile and your comment, says Communications Manager and "I lead community communications in EMEA. You can call it marketing".
Also, this publication is from the Business Post, which is based in Dublin (domain being “businesspost.ie” is clear about this point, and it’s already next to the title). That seems enough of a hint to me that this news might have Irish components.
I know in the years that I was earning into a deferred benefit plan, I barely gave it a passing thought. And, had you asked me if I would prefer cash or for the equivalent to be funneled into some opaque benefits system that would hopefully pay out someday, I'm pretty sure what I would have chosen.
Are some people better with defined benefits? Almost certainly. But at some point you're being pretty paternalistic to say you should much less must take that option.
It's designed to encourage people to save money into their pensions, to make up for decades of the government underfunding social security pensions. It seems really shitty to make that tax break conditional on job security.
How should a post tax annuity be calculated? The simplest annuities can probably be done (e.g. pay 100k and receive 6k a year til you die). But, if you paid tax on the full 6k that would mean that the 100k was being taxed again. However, tax none of it and that would see no tax on interest because it was being paid through an annuity. That's before one even starts thinking about spousal benefits or inflation linking.
My role has a general title of Communications Manager (we have a ~flat structure and our roles aren't particularly descriptive). This role sits within the Comms team at Stripe.
The majority of my time is spent telling the stories of businesses that build on Stripe (and helping users). In other companies, this is often called marketing or just "comms".
.com is an global domain.
Hence the tightening of DB pension funding and investment rules (PPA 2006), culminating in non taxpayer funded DB pensions being untenable expensive.
401k funds are as guaranteed as any defined benefit pension. They both get invested into SP500 index funds, and they both get bailed out just the same by the federal government. If the stock market tanks, the DB pension is going down just like any 401k.
I can think of people I know is big tech companies who were nearly fired. One guy ended up serving out a purgatory sentence as a CE because his boss got whacked. A year later, he’s an SVP when a friend of the old boss took over.
Ditto the opposite. A friend in a bank collects low performers purposefully to protect his core teams. He dutifully offers some cannon fodder up when the company demands tribute to the volcano gods.
And coincidentally, wealth inequality is unrivaled in modern times.
Again, you seem to be assuming that there was some special pool of money that went into defined benefits that got pulled back. Which isn't true. Companies pay what they need to hire including benefits packages.
In the former, you are promised (defined) how much you will get in your retirement, in the latter, you are promised how much will be contributed to your retirement savings (but not how much you will get).
> The nitpick about how much the manager shows how much you've been fooled.
I do not know what this is referring to.
>Elsewhere, a pension is a government guaranteed faucet of money for retirement.
The US has that too, called social security.
This was me, letting my opinions get the better of me.
Having to optimize the fees on your 401k is the fiscally responsible thing to do, under the system as it exists, but the fact that social security isn't enough to properly live off of is horseshit.
It’s silly to complain that US companies and US-focused sites shouldn’t use it.
All also true of .ie and .fr and .eu and whatever other TLDs you might want to choose.
>It’s silly to complain that US companies and US-focused sites shouldn’t use it.
Nobody complained about that.