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Stripe clawed back pension contributions after staff cuts

businesspost.ie

196 points by vdddv 3 years ago · 152 comments

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smca 3 years ago

(I work at Stripe and live in Ireland.) This article is written about Irish pension schemes. The mechanic that the article is talking about is standard practice in Ireland. And, in particular, it only applies to contributions by Stripe for employees who have worked less than two years.

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.

  • runamok 3 years ago

    The first tip off this was not in the US was the word "pension" which has long gone the way of the dodo bird in the US.

  • usea 3 years ago

    Things can be news to people even if they've been stated in a legal document somewhere.

    • ergocoder 3 years ago

      Not only it is legal, it is also a standard practice where everyone else is doing it.

      It is odd that Stripe is the only one who is criticized for it...

  • the_mitsuhiko 3 years ago

    I’m not familiar with the Irish system but why is it standard practice to claw back contributions for people? What is the reason for enabling and doing this?

    • Macha 3 years ago

      Their tax-exempt status is conditional on the pension fund being in action for at least two years. If they're given to you without that, they're no longer tax-exempt pension contributions but employee income which has tax implications for both employee and employer.

      • orra 3 years ago

        Yikes, that seems pretty horrendous law. In the the UK the tax exempt status comes from the fact you're locking away the income for, say, decades; and you'll be liable to normal income tax at the point of withdrawal.

        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.

        • etothepii 3 years ago

          Designed is a really strong word. The tax free nature of pension contributions come from the near impossibility of otherwise sensibly taxing annuities.

          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.

      • ghaff 3 years ago

        You get into some funny (and seemingly unfair) rules once tax exemption is involved. It's why you have limited rollover of unused FSA funds in the US--and the ability to rollover at all is relatively recent.

        • lotsofpulp 3 years ago

          And yet HSA funds are the most tax advantaged of all. No tax going in, can be invested in anything that can be bought via Fidelity, and no tax coming out, if used for healthcare expenses at any point in your life, even for your dependents.

    • astaunton 3 years ago

      Its not a claw back per-se. Under the Irish pensions laws an employee does not have the right to retain the employers contributions to a pension if they leave the position with the company within the first 2 years of contributions to the pension (does not mean 2 years of service. If you have a 6 month probation for example, the employer will not contribute for that time. The period is 2 years from the first employers contribution). Any employee contribution is fully retained by the employee. In this case, because they are being made redundant, the employers share of the pension is refunded (through no fault of the employee).

    • runnerup 3 years ago

      This is normal in the USA as well. Most traditional (non-FAANG-adjacent) companies have 1-6 year vesting periods for employer contributions.

      • brianwawok 3 years ago

        I have had many jobs with no vesting in my employee match. Heck for my company I own, I follow the “default” path from guideline 401k, and my match to my employees vests immediately.

        (But yes also had 1-2 jobs that the match had a vesting period)

        • arcticbull 3 years ago

          I've never encountered a vesting schedule for employer contributions myself, but I've always been aware of their existence. I think one company I joined had 12-18 month vesting schedule that they'd just recently gotten rid of.

          I wonder if it's more common outside of tech?

      • Jtsummers 3 years ago

        Also places with real pensions have similar vestment periods for the pensions, leave before then and you typically get your contributions back but certainly not the employer’s. Though those are rare outside government work in the US anymore.

      • subsaharancoder 3 years ago

        Amazon clawed back 401k contributions if you left before 2 years..I can't remember the exact timeframe.

  • secfirstmd 3 years ago

    No it's not standard practice. It's done in some companies but not that many. For those firms that do this, most waive it for redundancies.

    • Macha 3 years ago

      In all four large tech companies I've worked for, and my father's factory job, this is the up front stated policy on pension contributions.

    • anonymousiam 3 years ago

      I've worked in a few places with similar policies. Lots of companies will match your 401k contributions (up to a limit), but the matching funds have a "vesting" period (typically a year or two). Stock options are often offered under similar terms.

      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.

  • switch007 3 years ago

    Do you work in PR?

    • SilasX 3 years ago

      lol this is flagged (and I can't seem to vouch) but the parent is a PR employee of Stripe and didn't disclose that until challenged.

  • irmuda 3 years ago

    Perhaps it's worth disclosing you're on the company's PR / Comms team and run the @Stripe Twitter account?

    • hodgesrm 3 years ago

      I'm all for disclosure and do so myself when commenting on things related to my company.

      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

      • whimsicalism 3 years ago

        I think generally you should disclose a. if you work at the company and b. if you are related to a project at the company being discussed.

        If you are a professional PR/spin person for the company, you should definitely disclose.

        • smca 3 years ago

          You might have seen me on HN threads before. I've been at Stripe for ~four years and I'm happy to disclose that I work here.

          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.

          • switch007 3 years ago

            This sub thread isn't about disclosing _whether_ you work there, rather, your job there. You answered the parent's "a" but ignored the "b".

            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".

            • smca 3 years ago

              My comment above reflects exactly what I work on at Stripe.

              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".

    • hn_throwaway_99 3 years ago

      Why? The comment says they work at Stripe and live in Ireland, and they're just relaying factual information.

      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?

      • zamadatix 3 years ago

        Disclosures aren't about whether or not the statement is meant to be actually factual, the whole story, and moral it's about giving people the information they need to weigh when they consider if that's the case. It's reasonable to say a PR employee's response has a high likelihood of being more biased than a generic Stripe employee's response, or at least biased in a different direction. Again that doesn't mean the response is actually "wrong" or just a partial picture or what have you but it does mean many people appreciate considering the possibility of bias when trying to come to a full conclusion.

      • hklgny 3 years ago

        Because they took the time to disclose the parts of their situation that supported the point they wanted to make (work at stripe, live in Ireland), but disregarded the parts they knew would discredit them a bit (PR for the company). Also, coming to their defense from a throw-away is a curious choice.

      • bee_rider 3 years ago

        I think expectation is that tech companies will be nicer. Pretty sure this comes from the belief that tech workers are unusually talented or rare, and so the worker-company relationship is more like a doctor or classical engineer, less like a factory worker or technician (Not that doctors and other professionals are treated with great respect anymore — it is just a matter of perceptions, people haven’t updated their viewpoints for the current brutally mercenary environment). So, these stories tend to float to the top.

        It should be a story with real consequences for the company if anybody’s pension is yanked.

PopAlongKid 3 years ago

It is about a small number of employees in Ireland. Maybe "Ireland" should be added to the title?

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.

  • michpoch 3 years ago

    I think it should not be added. There are so many US-only news and we’re not adding the “in USA”.

    Please do not assume default = USA.

    • medellin 3 years ago

      You just argued why you should be the country in the title but then somehow came to the wrong conclusion

      • michpoch 3 years ago

        I just have realistic expectations what I can achieve in this calm Sunday evening.

    • zdragnar 3 years ago

      The news is really specific to Ireland due to Irish tax laws.

      Why shouldn't this very relevant context be in the title?

    • unethical_ban 3 years ago

      Your first paragraph signals US is the default.

      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.

      • makeitdouble 3 years ago

        “Default” and “status quo” aren’t the same.

        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.

      • fragmede 3 years ago

        Regrettably, due to USA's brand of capitalism, these days, the word pension means it's probably not a USA thing.

        • ghaff 3 years ago

          There are pros and cons to defined benefit (i.e. pension in US speak) and defined contribution (e.g. 401-k) plans. Among other things, defined benefit plans--when they were more common--were mostly oriented around people staying at the same company for a decade or more. Usually if you just stayed for 2-3 years you got nothing or almost nothing.

        • lotsofpulp 3 years ago

          There is almost no value to paying someone else to manage your retirement funds when you can do the same thing they do for 0.03% to 0.08% expense ratios with a target date retirement fund from vanguard/Schwab/fidelity or mix and match the various broad market stock/bond funds.

          • ghaff 3 years ago

            There often seems to be an implicit assumption that the money funding defined benefit contributions came from a magic money tree somewhere (or at least did so until it turned out that the tree wasn't producing enough).

            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.

            • unethical_ban 3 years ago

              There was a time where it was expected, and then it was taken away. Now, we are all slaves to the broader market with no guarantees, where once we had guarantees.

              And coincidentally, wealth inequality is unrivaled in modern times.

              • ghaff 3 years ago

                Nothing is keeping you from putting some portion of your salary into long-term low-risk bonds or even into annuities of various types. Your total compensation is presumably the same (given tax effects) so you're basically saying that you'd rather an employer handle some portion of your savings for you than handling it yourself. And there have certainly been defined-benefit failures and reductions of various kinds so there were pretty much never any guarantees.

                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.

          • fragmede 3 years ago

            A 401k is not a pension! The nitpick about how much the manager shows how much you've been fooled. Elsewhere, a pension is a government guaranteed faucet of money for retirement.

            • lotsofpulp 3 years ago

              Depends on the locality. In the UK, they refer to something similar to 401k as a pension also. The long form would be “defined benefit pension” or “defined contribution pension”.

              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.

              • fragmede 3 years ago

                > The nitpick about how much the manager shows how much you've been fooled.

                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.

          • unethical_ban 3 years ago

            Except back then pensions were tied to the company you worked for, and were guaranteed. 401k funds are not guaranteed.

            • lotsofpulp 3 years ago

              Assuming the company existed, and was not corrupt in handling all that money. But there is a lot of volatility in a company existing for 50+ years in the future, and there is a lot of corruption.

              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.

    • dymk 3 years ago

      The default assumption on this USA based site run by a USA based company is "USA" unless otherwise stated.

      • michpoch 3 years ago

        Then it should be news.ycombinator.us

        .com is an global domain.

        • catiopatio 3 years ago

          “[.com] was originally administered by the United States Department of Defense … and remains under ultimate jurisdiction of U.S. law“

          https://en.wikipedia.org/wiki/.com

          • gggggg5 3 years ago

            That hardly seems relevant? Literally all TLDs are ultimately under US jurisdiction, given that the ICANN is under US jurisdiction.

            • catiopatio 3 years ago

              US government built it, a US company runs it, and US law applies to it.

              It’s silly to complain that US companies and US-focused sites shouldn’t use it.

              • gggggg5 3 years ago

                >US government built it, a US company runs it, and US law applies to 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.

  • sharkweek 3 years ago

    Helpful information because as someone in the US I assumed the idea of a pension (outside of government jobs) had all but disappeared.

    • etothepii 3 years ago

      These won't be "defined benefit" schemes but defined contribution schemes much more akin to your 401(k)

    • lotsofpulp 3 years ago

      In the UK (and I assume Ireland), the term pension is used for more than just defined benefit pensions.

      • astaunton 3 years ago

        Correct, most pensions in Ireland (these days) are defined contribution. Even within the civil service / government roles it is becoming extremely rare to see defined benefit schemes.

  • vdddvOP 3 years ago

    Thanks for the suggestion. I did not add it because of HN guidelines: "please use the original title" https://news.ycombinator.com/newsguidelines.html

  • loeg 3 years ago

    This sounds exactly like the equivalent of unvested matching.

  • sirpunch 3 years ago

    USA has it too. Amazon Software Engineers can't keep their 401K company match if they leave the company before completing 3 years of service.

_trackno5 3 years ago

Disclaimer: I work at Stripe in Ireland.

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.

  • tedivm 3 years ago

    Your comment makes it seem like the article is pretty accurate then? Like they are clawing back the contributions, but you're saying it's okay because their contract allows them to do it. I'm not sure how this makes the article misleading.

    • _trackno5 3 years ago

      Of course it's okay to follow a legally binding contract.

      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.

      • tedivm 3 years ago

        Legality and morality are different things- as is marketing and recruiting. This is why a lot of companies wave vesting periods during layoffs. Eventually the market will move in the other direction and the companies that treat their staff better during this time will have an easier time rehiring.

  • mugsie 3 years ago

    In Ireland there is quite a few companies that have waived this type of clause when they are doing redundancies. Let's not say the company didn't have a choice

  • bee_rider 3 years ago

    Quit vs laid off seems like a reasonable thing to push back on in that contract, wonder if they’d be open to that sort of thing.

    • _trackno5 3 years ago

      I agree with you, but I don't if it would make much of a difference.

      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.

      • bee_rider 3 years ago

        Perhaps a bit off topic, but there must be some way to act as sort of a go-between for the US and EU, right? I mean you are going to have to put up with the sort of awkward automatic enthusiasm of Americans anyway, may as well take advantage of it!

  • skellera 3 years ago

    This isn’t that different from US 401k vesting.

    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.

    • bradly 3 years ago

      Amazon takes back all 401k matching if you leave before three years? That is very different from my experience at large tech companies.

      Edit: just looked it up and it is three years. Brutal. https://www.amazon.jobs/cs/landing_pages/benefitsoverview-us

      • skellera 3 years ago

        Yeah, Amazon has the worst benefits for big tech. They started “considering” improving things before the economy was going down but seems like all that stopped.

        It’s more in line with “traditional” companies. Amazon is going more down the IBM route everyday. For any Amazonians, it’s day 2.

    • teg4n_ 3 years ago

      Damn, i guess that’s another reason to avoid working at Amazon. That is ridiculous.

  • pinkcan 3 years ago

    the fact it is being done to people who are being laid off shows it's not just a retention mechanism

tqwhite 3 years ago

If some one leaves the company or is fired for cause, claw back the contributions. If the company "makes them redundant", claw back is nasty and immoral. People joined the company with a fair expectation that they would get benefits. It's cheating to do this.

I now consider Stripe to be a gonif company.

  • thriftwy 3 years ago

    Your first sentence does not make much sense to me. If somebody leaves your company for any reason, they should get to keep everything they earned to date.

    • cookingrobot 3 years ago

      I’m not familiar with Irish pensions, but in general if the benefit has a vesting schedule that means you earn it over time. If you leave the company for any reason you get to keep the part that’s vested, and not the remaining unvested part.

    • lotsofpulp 3 years ago

      I classify compensation that has not yet vested as not yet earned.

      • thriftwy 3 years ago

        That is correct, then the article should also mention it.

        • lotsofpulp 3 years ago

          > 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.

oxfordmale 3 years ago

The Tech industry is very cyclical. In two years Stripe, and other companies that handled redundancies badly, will be asking themselves why they struggle to recruit top talent.

  • tyre 3 years ago

    Stripe handled the layoffs incredibly well, in my opinion as someone who was laid off.

    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.

    • dudul 3 years ago

      How did the founders take responsibility?

      • tyre 3 years ago

        They did an all-hands the day of the layoffs with everyone being let go. They walked through why they'd hired so quickly, the new information (both macro-economic and within Stripe) that caused them to reconsider, and where that led. They emphasized that this was their decision: they set the course for hiring at the rate at in the places that Stripe did over the prior ~18 months; they were the ones who decided on the layoffs.

        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.

    • ipaddr 3 years ago

      They founders took responsibility and cut their salary so you could stay? They said they took responsibility took the credit for tough choices and fired you. Now you have 16 weeks / 4 months to get another position when no one is hiring and interviews take 2 months on average before the offer is pulled.

      Depending on employees age, length of employment 16 weeks can be an extremely low amount and the courts could get a higher settlement.

      • tyre 3 years ago

        1. I don’t know what their salary is but I think it’s like a dollar.

        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.

      • dubcanada 3 years ago

        What country are we talking about? The US does not offer any guarantee for severance.

        If we are talking Ireland, as others have said the law appears to be exactly this.

  • arkitaip 3 years ago

    Unfortunately this is almost never true because of the endless supply for desperate, gullible or just arrogant people who are ready to work for top tech companies.

    • sja 3 years ago

      I’m not sure your statement and the parent comment are in conflict. What percentage of “ desperate, gullible or just arrogant people” are top talent?

      • rightbyte 3 years ago

        Dunno about exact numbers but there were some HN commenters when the layoffs started 2022 writing about "cutting fat" and "low performers" who thinks layoffs happens to others and not them I guess and that their bosses know who the lowperformers are.

        • Spooky23 3 years ago

          People repeating that stuff are true believers. The reality is that the politics of companies is complex.

          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.

        • oxfordmale 3 years ago

          There are genuine low performers, however, based on my personal experience, they generally only constitute 25% of the people laid off for low performance. If management has overinflated expectations of your project, you will be a "low performer". If you happen to do badly on a project with high visibility to senior management, you will be perceived to be a low performer too, even if your delivery on other projects was brilliant. If your last project failed, often because of external factors, you will be deemed to be a low performer.

          • rightbyte 3 years ago

            My favorite ranking dysfunction is that people who do the bear share of work or the hardest work also cause the most problems (bugs, rereleases etc), making them look bad if the judge have no clue how much they have done or how hard the task were.

    • oxfordmale 3 years ago

      I have observed this from the hiring side. Often the approach is to drop standards. This can result in problems for existing staff, who have to pick up the pieces. As a result they are also more likely to leave.

techireland 3 years ago

Every company pension in Ireland has this as standard, it’s from the pension provider. Hilariously, the Business Post pension provider will have it too. You can’t clawback something that people never had. It’s also good for the employee as if you’re out (voluntarily or otherwise) within 2 years you can get your own contributions back out vs locked in a tiny fund. On one hand they got the redundancy package that far surpassed statutory, and then on the other they’re looking for something that they were never entitled to. Seems a small bit strange that we’d cry a river for well paid tech workers “losing” a small amount of money versus what they’d have gotten out of the process. There’s other people we should be looking out and fighting for.

  • astaunton 3 years ago

    Just a clarification. If they were in the role for less than 2 years there is no legal reason to provide a redundancy package (statutory redundancy). The fact that employees are getting a payment even if they were there less than 2 years should show that Stripe are not "clawing back" contributions but that the refund is due to a stadard mechanism within the pension scheme.

    https://www.citizensinformation.ie/en/employment/unemploymen...

  • mugsie 3 years ago

    I mean, just because someone is well paid doesn't mean they deserve to have money taken from them?

    Every company has this as standard, but a lot have waived it for redundancies, so let's not let stripe off the hook.

MarkSweep 3 years ago

Is this article talking about 401k in the the US? If so, it’s fairly common for a 401k match to vest over two years.

  • Macha 3 years ago

    Ok, so the way Irish pensions work (which is the topic here):

    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.

    • DangitBobby 3 years ago

      > 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

      What happens if you leave in 3 years? Is it a 2-year window that vests or once vested forever vested?

      • Macha 3 years ago

        For N > 2 years, everything in the fund is tax-exempt (even funds contributed less than 2 years ago), but you no longer get the option to refund your contributions to cash when moving, you need to wait until you're 50 to start withdrawals.

  • JimDabell 3 years ago

    From the article:

    > 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.

  • rcme 3 years ago

    It’s fairly common, but also insane in a world where the average tenure at a company is a few years. Basically a way to say you contribute to a 401K without actually contributing anything.

    • MobiusHorizons 3 years ago

      Sounds like it could be viewed as a small incentive to stay, which given the short average tenure is probably a good thing. High churn rate is not generally a good thing for businesses or products regardless of the individual benefits.

    • dv_dt 3 years ago

      It’s a way potential employees will understand as devaluing the benefit. Basically making it likely a pointless inducement to join. About 50/50 of the companies I joined offered 401k matching vested immediately.

      • DangitBobby 3 years ago

        The first company I worked for started offering a 401k about 1 year into my employment there. I remember seeing the low percentage match and 2-year vesting schedule as kind a bit of cheap-skate middlefinger, and declined the benefit. Probably did more harm than good to offer it.

        • dv_dt 3 years ago

          2-5% match is pretty good imho. Any match percentage is basically doubling your savings. If the vesting is good, save up the the limit of match. With tech industry salaries higher 401k matches would just hit the max limit for 401k frequently. The vesting time is the cheap thing. Though once for me, the vesting was still valid if you left the company - it was just delayed.

  • PopAlongKid 3 years ago

    It is about a small number of employees in Ireland. Maybe "Ireland" should be added to the title? (copied from my other reply)

  • Mountain_Skies 3 years ago

    My first job out of college in 2000 had a two year vesting schedule. Every job since then has been immediate vesting, though one did wait until 90 day after starting work before matching started. Two year cliff vesting probably still exists but ends up not saving the company a whole lot compared to the bad impression it gives to potential employee candidates.

  • jmyeet 3 years ago

    Amazon does this. Most other tech companies do not (eg pretty much any other FAANG).

nivenkos 3 years ago

Is this legal? Is there no trade union negotiation either?

  • ergocoder 3 years ago

    Not only it is legal, it is also a standard practice. Everyone is doing it.

    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.

  • JimDabell 3 years ago

    From the article:

    > 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.

  • Macha 3 years ago

    Most industries in Ireland are pretty unionised, but tech is one of the exceptions here.

darth_avocado 3 years ago

Stripe has pension?

mariambarouma 3 years ago

They were being applauded a few months ago as to how to make people redundant. As if there's a good way. It was just a cheap shot at Musk.

bazzert 3 years ago

It would be the equivalent of a US company clawing back a 401k contribution match, which is kind of crappy imo, especially if after a year.

  • lotsofpulp 3 years ago

    It would be the equivalent of a U.S. company clawing back a not yet vested 401k contribution, which can happen. It is the whole point of vesting.

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