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Highlights—March 10, 2012

• WRAL-TV: As giant IBM learns to run, many U.S. employees left behind. By A Former IBM Employee. Excerpts: BM employees - even former ones - are reluctant to speak with the press about what is happening at the company as it goes through another "resource action" and 'rebalancing" - two IBM terms for layoffs. So in the interest of sharing with WRAL Tech Wire and WRAL.com readers how one veteran really feels about Palmisano and his changes, here is the full text of that letter with the permission of Alliance@IBM:. The article is credited to "An IBM employee:"

  IBM’s shift in workers is not about skill or job rebalancing. Sam is replacing older American workers with low wage college hires, as well as contractors and foreign workers who are typically young, male, and without benefits. The global employee count is almost 500,000, but the decimated American count of 105,000 in 2009 is now estimated to be about 98,000

  Sam is not retraining Americans. He says IBM spent $600 million training and retraining “and people can’t move up the skill ladder. So we have to replace them. I think it appropriate and fair. You give them the opportunity to reboot and help them transition. But if they don’t do it, then they don’t do it.” This rationalization is disturbing and untrue. It shifts responsibility for being fired to employees saying many tens of thousands of Americans are not able to learn.

  instead, while the HR team and written performance objectives require employees to create skill plans, which are used as a determinant as to who is fired, the business end for years has told us there is no longer a training budget. Skill plans and mandatory conference calls that detail improved, sophisticated career path programs are ignored and replaced by the rare approval for a class or conference for a few employees. Paranoia to cut costs is so strong my manager repeatedly chastised me for spending $30 on a company course I had thought was free. The truth is, IBM would not train Americans already targeted for replacement because they are considered expensive – the reason for offshoring so many positions they want filled by low wage workers. The flood of layoffs attests to this. Many laid off employees are required to train their foreigner replacements to do their job. This demonstrates they have the skills.

  Then, it does not matter what skills an American has.

  IBM employees typically find their next project by applying to internal job posts. “Americans need not apply” seems apt. An email reply to an application for a job in my neighborhood stated that the first group considered is foreigners. It reads, “The cost difference is too great. IBM India may not have visa ready resources with the specific skills, so many times U.S. resources do fill seats”. ...

  Sam, your layoffs are mean-spirited robbery. The last work day is 4 days or so before month’s end so we lose a week of earned vacation pay. IBM’s “stealth” layoffs skirt the Warn Act with small numbers at many locations on different dates. Instead of 60 days notice and pay, we get 30. This unfairly gives IBM a massive cost savings as we are kicked rudely to the curb.

• WRAL-TV: Raleigh homeless woman once worked at IBM in New York. Excerpts: Cris Kent never imagined she’d be homeless, living in a truck with her brother. The 64-year-old Raleigh woman once had a finance and purchasing job at IBM in New York. She moved to North Carolina when her job was downsized, but her life quickly crumbled. Instead of retirement, Kent said she now thinks about where she will sleep at night. After moving to North Carolina, she had a job and a house in Johnston County with a few acres. Her steady employment dried up, and she lost her home to foreclosure, crushing her credit.

  Food stamps, a Social Security check and a modest IBM pension couldn't stop the cycle of bouncing from motel to parking lot. ...

  Julie Sager, financial stability program director at Triangle Family Services, says she "didn't used to see so many successful, college-educated people." “We see a lot more of those now than we ever did," she added.

  Selected reader comments follow:

  • At least the CEOs and execs at IBM have a bed (made of money) to sleep on at night. And now so do others in China and India due to the offshoring IBMs been doing. It's a shame those foreign wages won't do her much good. Personally, I think IBM's management should be ashamed of itself. I'm ashamed of them. Hope she gets some help and some good breaks.
  • I put away 15% of my salary every pay day. But just to survive, pay my healthcare and my gasoline bill, I am having to cut back on that. And even with my retirement and savings, I am DEPENDING on Social Security and Medicare to be there in current of better form. It's easy to say 'save', and I have my entire life. But I also know that if things do not go exactly according to lan, it won't last.
  • Welcome to the typical IBM story - cutting anyone who is approaching the number of years where they would qualify for decent retirement benefits --- all the while top IBM executives take outrageous salaries while shipping U.S. jobs overseas.
  • Even the best financial planning won't help if a company does away with their defined benefit retirement plan through bankruptcy or other nefarious means. My wife's retirement has lost over $150,000 in value due to the company going bankrupt and restructuring. She has worked for them for 28 years. It definitely made us make some changes. Nothing is certain anymore...
  • So long as IBM and other companies like it keep sending jobs overseas, it's only going to get worse. Worse for US workers, poor service for our customers, and the big corporations keep posting record earnings. If our beloved government doesn't put a stop to it, half the country will be homeless and on welfare. If companies want to send jobs overseas, they need to operate like foreign companies, and pay for doing business in the US. Now they get the very best of both worlds while it's workers suffer. I know several people at IBM that were making 70 to 100K a years. They were laid off a few years ago and now live with their parents, unemployed and without health insurance at age 50
• Yahoo! IBM Pension and Retirement Issues message board: "Recent RA casualty" by "jnhryckowian". Full excerpt: Eligible to retire but still have to work to survive given current living/medical expenses. Fortunately, there is a "Separation Payment", but I am concerned about the wording within. Any recommendations for legal council? Thanks! John.
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Recent RA casualty" by "madinpok". Full excerpt: There is little you can do about the legal language if you want to collect the severance pay. Is there something specific that concerns you, or do you just have an overall distrust of the agreement?

  A lawyer who specializes in labor law should be able to help you understand it better, but will probably tell you that it comes down to a take it or leave it choice. There is zero chance that IBM would agree to modifications.

  If you choose not to sign, you will still have access to COBRA coverage (at your expense) and then your retiree health insurance coverage (probably under the FHA). But besides the severance pay, you will probably also be giving up the transition medical plan, under which IBM will continue to pay for part of your COBRA coverage for 6 months to 1 year.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Recent RA casualty" by "chz_whiz". Full excerpt: John, you're welcome to hire an employment attorney, and one might provide a cursory review of the agreement and listen to your concerns at no cost. The odds of the attorney being able to modify the agreement, unless you have a very unique situation, lie between slim and none (and more toward the latter...IBM has good attorneys.) So your options are probably limited to: (A) sign, and leave with separation; (B) don't sign, and leave w/o separation. Sorry for your situation, but at least you are retirement eligible.
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Recent RA casualty" by "jnhryckowian". Full excerpt: madinpok and chz_wiz, Thanks for the replies. Probably should have been more specific with my concerns. Basically I still hope to find employment, specifically with a vendor that IBM is currently engaged with. Within the RESOURCE ACTION SUMMARY PLAN DESCRIPTION (SPD) provided to me:

  "Employees who are offered employment arranged by IBM with a third party, and who will initially receive comparable terms and conditions of employment, will not receive the payment or benefits of the resource action. The resource action project office will, in its sole discretion, determine when IBM has arranged employment that initially provides the employee with comparable terms and conditions of employment."

  Since "IBM is providing you with Right Management Career Outplacement services as part of your transition package." Does use of this service constitute "arranged by IBM"?

  Also have concerns with the following: "Any employee going to an IBM subsidiary or affiliate as a regular employee...will not receive the payment or benefits of the resource action."

  When I raised this concern with ESC, I was told "they had no idea who might be IBM subsidiary or affiliate" and HR had to seek legal advice. I am still waiting for a reply. Anyone else familiar or concerned with this wording? Thanks.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Recent RA casualty" by "madinpok". Full excerpt: I've seen a few cases where IBM has offered an employee who was being terminated a new job with another company. In these cases, the employee did not receive severance pay or transition medical benefits.

  I don't think anything that occurs with Right Management would count as employment arranged by IBM with a third party. Right Management is a placement service that will help you write a resume and search for a new job. But finding that new job is up to you. In this case, you should expect to receive the separation package.

  If you find employment with a vendor that IBM is engaged with, I don't think that will count as something "arranged by IBM" unless IBM actually played a role in getting you the job. Nor would I consider them an affiliate. If you get the job due to your own networking with your contacts at that company, you should be able to get the severance package.

  IBM HR should be able to answer these questions. If they can't, then it is probably worth an initial discussion with an attorney who specializes in the labor field. A phone call or letter from your attorney may also motivate IBM to give you an official answer.

• Yahoo! IBM Pension and Retirement Issues message board: "Pension and New York state unemployment...revisited" by "Gordon". Full excerpt: OK, I am 61 with 33.5 years with IBM. I will be laid off (from IBM) effective 3/28/12. I will start collecting my pension as soon as the paperwork gets processed. I have gotten varying stories concerning collecting NYS unemployment and a pension check from IBM. Most story's lean towards no, but I have heard that if you are collecting a pension that will not or has not grown, then you can collect. Since IBM pensions stopped growing in 2007, would this work?
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension and New York state unemployment...revisited" by "madinpok". Full excerpt: Since you are in NY, yes, you can collect both unemployment and your pension. Your initial application for unemployment benefits may be denied because many of the people who process the applications don't understand the fine point of the law that says that if your work over the last 18 months did not increase your pension benefit, then you are eligible for UE.

  If you are turned down, appeal the decision. Make sure you supply documentation that shows that IBM froze the pension plan as of 12/31/2007. There is a statement to this effect on page 5 of USHR113, which is available in the files section of this group in the folder called "IBM Retirement Benefits Info."

• Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA (Future Health Account) Rates" by "madinpok". Full excerpt: The retiree medical plans have low, medium and high deductible options. The high deductible plan has a $2500 per person, in network deductible in 2012. That's the highest deductible plan IBM offers. The plans are similar as far as the names go to what is offered to active employees, but the deductibles tend to be higher for retirees.

  The low/medium/high deductible plans will cover you in any state you travel to. If you choose one of the HMO or EPO plans, you will be restricted as to where you can get your medical care.

  The plans are indeed expensive, but so is most medical insurance. As an employee, you pay only a fraction of the cost of the plans and IBM pays the rest. As a retiree (especially with the FHA) you are pretty much on your own.

  The cost of the retiree plans is about twice the total cost of the plans for active employees. This is because IBM places retirees in a separate group and, since they tend to be older and have more medical expenses, the premiums are higher.

  Depending on the state you live in and your health, you might be able find a less expensive plan on the open market. But it is far from easy to do and you need to be very careful to make sure you understand what the insurance will really cover.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA Rates" by Gary Brown. Full excerpt: IBM Retiree Prescription (self-funded) coverage is really high-priced for spouse. Middle-name of IBM remains "Business" ! At the end of this year we will we have saved enough to just about pay 65-70% of the cost of 42 MPG Cruze Eco by not using the prescription coverage for a spouse not yet on Medicare. Yes, we shop the open market for her meds and run the risk of her not needing some multi-$thousands meds for about the next 8 months.
• Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA Rates" by "netmouser". Full excerpt: Whatever plan you choose, be sure it has an annual cap on out of pocket expenses. You may also want to be sure it has no limit on prescriptions like your employee plan - some plans have none or a maximum drug cap that they will pay that may be limited to $1000 or so annually. A major illness can cost zillions of dollars in drugs. Not having these are the reasons many with insurance go bankrupt.
• Glassdoor IBM reviews. Selected reviews follow:
  • IBM IT Specialist: (Current Employee) “I had high expectations when I joined IBM for opportunities that never materialized. Very Disappointed.” Pros: Work from home and no travel. Cons: Too many levels of managers. BAD management decisions at at every level. Poor execution of critical processes and projects. Performance rating system is a complete joke. Begging for office supplies is embarrassing. Typical politics get in the way of trying to do the right thing. Advice to Senior Management: Morale cannot be any lower than it is today. Revamp PBC system to use clearly QUANTIFIABLE metrics. "Relative Contribution" is completely subjective and results in abuses. PAY FOR PERFORMANCE, like IBM advertises. Salary has barely kept pace with inflation. Not what is expected from such a "respected" company. No raises and pitiful bonus payouts are unacceptable.
  • IBM Staff Engineer in Essex Junction, VT: (Past Employee - 2010) “Average place to work.” Pros: Nice atmosphere to work. Fellow employees are easy to get along with. IBM is reasonable about work/life balance. Cons: The bottom line is profits and always cutting cost. Doing more with less, year after year is the norm. Layoffs come quite often and many good employees are unfortunately lost in the process. Advice to Senior Management: Be patient with the economy's ups and downs. Don't be so ultra reactionary to changes in the market when making cuts. This is especially true when dealing with laying off seasoned employees with much needed knowledge and experience.
  • IBM Anonymous: (Current Employee) “After 29 years, I have seen tremendous changes. It is no longer the prime place to work that it used to be.” Pros: salary, experience, good on your resume, good benefits, educational opportunities, the long-term people are good people to work with, possibility to work from home in some organizations. Cons: The workforce is being heavily globally resourced. More and more jobs are moving to other countries, with IBMers being laid off, with no regard to performance or length of time with the company. If you are exempt from overtime, then you can work your life away, with no recognition. Advice to Senior Management: Be careful about how you are gutting the company. You are removing years of experience and training and replacing it with people with a lack of experience in their jobs, or in the work world in general. Those people are getting their training at IBM and then leaving to other, better paying companies in their own countries. How is that building a new, stellar employee base, with a strong bench strength? Where is the future of the company?
  • IBM Anonymous in Frankfurt am Main (Germany): (Current Employee) “learned a lot but not appreciated.” Pros: great reputation, great brand image, knowledge sharing diversity. Cons: weak development of talents. salary is not good.
  • IBM Project Manager in Chicago, IL: (Current Employee) “In US, pays just enough that you won't leave until you are fired.” Pros: Work with some very smart and wonderful people. The people "in the trenches" are the best around. I have really enjoyed the teams I have worked with inside the company. Very smart and hard working people. Mentoring is available depending on "who you know" Some online training can still be had for free. Paid training is extremely limited and you need to take classes on your own time. Depending on the job, project & manager decent work/life balance and time off can be had. Cons: Lots of jobs in US being eliminated. Work/Life balance can be an issue. Especially when working the global clock (needing to be available to meet with teams in all time zones). Enormous pressure to meet deadlines/cut costs, often not realistic. Advice to Senior Management: Stock goes up, but US jobs are lost. A tough pill to swallow for an employee in the states.
  • IBM Program Manager in Phoenix, AZ: (Current Employee) “Great place to learn about cost cutting. Bad place to grow a career.” Pros: Work from home if legacy employee. Good healthcare. Cons: Your salary today will be your salary 5 years from now. Raises are about 1% a year. Bonus about 3%. Management has no interest in growing or advancing your career. They believe any off-shore or Dubuque person can do your job. Doesn't matter if it takes 3 of them to do it, as long as it is for less money. Management's priority is cutting costs at the lower and mid-level and maximizing profit for those at the top levels. As an employee you are only a means to their end. Advice to Senior Management: The maximize profits at the expense of everyone below senior leadership model will only work short term. Ginny is simply a clone of Sam, that is why she got the job. Accounts have too many PE/DPE and they do not take any time to learn the names of the people working with them to support the customer. Good luck!
  • IBM Software Engineer: (Current Employee) “Always a target.” Pros: * Good health benefits; * Can work from home if needed; * Decent amount of vacation; * Pay isn't horrible. Cons: * IBM is moving all jobs out of the US. * You are always a target for a lay-off - If India or China can do your job you WILL be laid off. * Bonus pool non-existent. * Raises non-existent. * IBM only cares about their stock prices and will cut anyone and anything to get there. Advice to Senior Management: Doesn't matter - they don't and won't listen. Upper management is soooo disconnected from the average worker. They have zero clue about what is going on.
  • IBM Senior Program Manager: (Current Employee) “I no longer respect the senior management of IBM. They no longer respect the US IBM workforce.” Pros: I used to think it was a great place to work with unbelievably smart people. Some are still left, but the numbers are dwindling quickly. Cons: There is no longer respect for the individual in IBM. You may be lucky to have a great first line manager, like I am, but you are constantly worried about the next layoffs. It's a toxic environment. Advice to Senior Management: You are losing your greatest advantage with all of the layoffs in the US and other 1st world countries. You cannot stay in the leadership role if you keep losing your senior leaders. Stop before it is too late.
  • IBM Director: (Current Employee) “Could have / Should have been Great.” Pros: Big Company with Big Resources. Some work and schedule flexibility/ Cons: Poor use of resources. Impossible to get investment even with formal, unanimous approval. Anyone can disagree and stop processes; even when not involved. The "matrix" makes things impossible to get anything done. Lot of talk, virtual no empowerment. Must escalated to senior executive leadership to get anything done. Advice to Senior Management: Lots of smart people, nothing getting done. Stop rewarding people who aren't leaders, empower employees to actually take action, and get rid of the ridiculous matrix environment and create clear lines of authority. No company should have 400,000 employees...
  • IBM Senior Managing Consultant: (Past Employee - 2010) “Good consulting company to work for, must love travel...” Pros Global organization with strong name recognition in industry. Clear criteria for the achievement of each staff level and a honest attempt at evaluations. Co-workers are mostly intelligent and enjoyable to work with. Work is mostly interesting. Cons: Constant travel if you don't work in a large market that has many multinational clients. Huge bureaucracy makes doing the right thing for employees difficult (company policies will override individual circumstances). Relentless push for high utilization towards quarter/annual period end, satisfaction of Wall Street sometimes comes at the expense of clients and staff. Training is an afterthought, the first thing that gets cut and considered to be a sacrifice on the company's part (in terms of billable hours), not an investment in staff. Advice to Senior Management: Treat your staff like the valuable assets that they are. Recognize the impact that over-zealous policies and procedures have on morale. Invest more in training and conferences.
  • IBM IT Project Manager: (Current Employee) “IBM has a good mentoring program. Their performance rating is unfair because they grade using the bell curve.” Pros: Ability to work at home. Project Managers can work on different accounts. Good health benefits package. Cons: The Performance rating is unfair. Some of the Managers do not help with career advancement. IBM is sending some of the technical jobs offshore to India and laying off US workers. Advice to Senior Management: Need to work on work/life balance with employees. Salaried employees are expected to work 15% OT with no additional pay, unfair.
  • IBM ID Administrative in Boulder, CO: (Past Employee - 2011) “Went downhill quick.” Pros: The immediate supervisors were good. The co-workers were good. Cons: Senior management, lack communication, lack of professional growth, lack of promised restoration of compensation, the quasi qualified many, and the select qualified having to cover for the unqualified. Advice to Senior Management: Hire supplementals and full timers, give the carrot once in a while instead of just leading us with the promise of it eventually.
  • IBM Anonymous: (Current Employee) “The company isn't what it used to be.” Pros: It is very large and there are a diverse set of opportunities. Cons: Senior employees seem to be targets for being "rebalanced." Advice to Senior Management: The company is about as thin as it can get...the field personnel are stressed to the limit, there is no Work/Life balance, and employees are no longer valued assets, they are seen as overhead.
  • IBM Senior Consultant in Melbourne (Australia): (Current Employee) “Learning opportunities.” Pros: - breadth and depth of the industries you can work on; - opportunity to travel if desired; - many clever people you can learn from; - great to build foundations; - graduate salary is very competitive to market rate; - many learning opportunities.

    Cons: - salary is not at the higher end of the market rate (it's at the average end); - performance rating can be subjective depending on manager you get; - depending on demand, may not get a role you like; - lots of red tape to do in your own time; - work life balance sometimes hard to find if project is behind schedule.

    Advice to Senior Management: I've seen many great and clever employees leave IBM due to the salary not being competitive enough. It appears like IBM would rather pay more for an experienced hire rather than increase the salary of an existing IBM employee. IBM need to either become more competitive with their salary or improve their employee recognition programs or employee benefits to retain their employees.

  • IBM Sales Representative in Dallas, TX: (Past Employee - 2010) “Experience overall was good. I would give it a 7 out of 10.” Pros: Name branding that customers recognize and respect. Cons: No personalization of workplace and people. You feel like a number at a big corporation. Advice to Senior Management: Treatment of employees in the 70s, 80s and 90s was impeccable. "Think" was one of the mottoes that drove employees to be innovative creative. Today, employees are simply asked to do the job.
  • IBM Anonymous: (Current Employee) “Fulfilling” Pros: Learn to be fully independent and accountable for your own judgement. Take risk, learn from mistake and move on. Cons: Large organizations and focus from top management in relating to guidance, benefits and other perks could not be spread sufficiently and fairly. You need to work doubly hard and long hours to stay visible and to be recognized on the work effort you put in. Advice to Senior Management: Work life balance!!
  • IBM Software Engineer in Costa Mesa, CA: (Current Employee) “Demanding, but can be satisfying” Pros: 100% matching 401K contributions. Use of leading edge technologies and tools. Flexible working arrangements. Great experience in working with highly skilled and knowledgeable technical professionals. Pride of working for a renowned and respected technological giant. When you mention you work for IBM, people automatically respect you and treat you differently, in a positive sense.

    Cons: Too many processes and inefficiencies to get the simplest task completed. While the working arrangements can be flexible (depending on your manager), there is a lot of pressure to get work done even though there are limited resources available. If a team member retires, resigns (yes, that happens) or is "resource actioned" (i.e., laid off), IBM does not replace that member, and remaining team members are expected to pick up the slack. There is no sense of job security, no matter how well an employee performs, or how well the division or business segment does in terms of generating revenue. There does not seem to be any rhyme or reason to decisions to lay off an employee. I've have personally seen IBM lay off highly skilled, knowledgeable, positively-reviewed, and experienced employees, in very successful, revenue generating projects. Too many meetings. By the time I get out of meetings, almost the entire day is gone.

    Advice to Senior Management: Reduce required meetings, and try to eliminate inefficient processes and requirements. Ask the typical employee how much time is lost on attending meetings and trying to obtain needed resources to complete a project on time. You would be shocked!

• Urban Institute: This Is Not Your Parents' Retirement: Comparing Retirement Income Across Generations. By Barbara Butrica, Karen E. Smith, and Howard Iams. Abstract: This article examines how retirement income is likely to change for boomers and persons born in generation X compared with current retirees. We use the MINT model to project retirement income, poverty rates, and replacement rates for current and future retirees at age 67. We find that retirement incomes will increase over time, and poverty rates will fall. Projected income gains are larger for higher than for lower socioeconomic groups, leading to increased income inequality among future retirees. Boomers and GenXers are less likely to have enough postretirement income to maintain their preretirement standard of living compared with current retirees.
• Financial Times: Lunatics have taken over the boardroom. By Luke Johnson. Excerpts: Sometimes it can seem as if the executive suites of large organisations are actually lunatic asylums. A director of one of the US’s biggest companies recently regaled me with stories from the front line of corporate madness. Its boardroom has been dominated by infighting for years. Chief executives come and go, the business blunders on, but politics overshadows everything.

  This company is so large it would take a nuclear attack to sink it. Yet its very scale means those jockeying to be captain of the ship can afford to spend their entire time backstabbing, stealing credit from rivals and waging turf wars. Shareholders, customers, staff – they are almost ignored while the various leaders seek status at any cost.

  Possibly in previous eras, bosses were less selfish. Even ambitious types, who clawed their way up the corporate ladder, seemed to care more for the institution where they worked. Now their personal career is all that matters. The individual’s priorities are the only agenda, even if that conflicts with the workplace. Perhaps this is revenge for the way modern capitalism has dispensed with much loyalty towards personnel, how the traditional relationship between employee and employer has frayed and become highly legalistic and hollow. ...

  More likely though, demented office politics represent an external manifestation of various mid-life crises. Boardrooms are overwhelmingly populated by men aged 45 to 60. By this age, most of the players have worked out that more money doesn’t bring happiness; time is taking its toll; maybe the striving and sacrifices weren’t really worth it; and the participants tend to become more acutely aware of their mortality, shortcomings and missed opportunities. Regrets and anger can become the dominant emotions, as optimism and hope gradually diminish.

  Thus the boardroom can end up resembling a psychiatric ward. Motivations diverge violently, and maintaining a rational sense of purpose can become impossible. Meanwhile, new technology, changing demographics, the rise of emerging economies, the financial emergency and other threats mean many western organisations face an existential reckoning. Plenty are standing on a “burning platform”, as the CEO of Nokia put it – yet those in charge bitch and scheme even as the flames lick their boots.

• Wall Street Journal: What's So Wrong With Roth 401(k) Plans? Workers haven't embraced this savings option, but some experts say they should. By Rachel Louise Ensign. Excerpts: Although fund companies say they have aggressively marketed Roth 401(k)s, the adoption rate has been slow. Fidelity Investments, which administers retirement plans for 12 million workers, found that only 6% of plan participants with the option of enrolling in a Roth choose to do so. At Charles Schwab Corp., that figure is 15%, and at Vanguard Group it is 9%.

  Part of the problem, experts say, is that while the Roth 401(k) is fairly simple to understand, determining whether one is right for you is often anything but, requiring a careful assessment of both your current and future tax situation. "It's both a macro and a micro decision," says Gil Charney, principal tax researcher at the Tax Institute at H&R Block, a division of H&R Block Inc.

  Who might benefit from a Roth 401(k)? Broadly, it is the same population for whom the Roth IRA is a good fit: those who expect their tax rate to be higher in retirement than it is currently. That may include investors who think the government will raise taxes in the future. By contrast, individuals who expect their tax rate to be lower in retirement are better off with a conventional 401(k) that delays the payment of taxes.