401(k) Plans to be restructured?

Lots of people are spending lots of time talking and writing about how to make 401(k)s more reliable retirement vehicles. The first notion is to implement “automation” across the board. That is, to mandate auto-enrollment, auto-contribution increases with raises.and auto-IRA contributions for smaller companies. The IRA component would take new legislation while, as we’ve mentioned [...]

Meltdown achieves what Congress could not: 401(k) fees going down across the board

One good thing about this Bear market is that it has the power to clean up a lot of fees and expenses. Investors, and fair-minded advisers, could never seem to extend the clean-up beyond individual initiatives, while the government proved useless in this regard, tamed as it was by the lobbyists from the mutual fund [...]

Wealth management in a post-meltdown world: A new model for advisory firms & 401(k) plans taking shape

Thinking about the future of wealth management? The following analysis seems to be a sensible forecast of fundamental changes to come. Veteran financial services analyst Bob Veres thinks the fee for asset management will be cut in half, while other wealth advisers agree that the trend will be toward unbundled services, each of which will [...]

New 401(k) liability: What’s risky is risky and what’s safe is — also risky

What becomes of fiduciary responsibility when safe options are only safe until they’re not? Here are a few tips to help plan sponsors avoid new worry lines during the current crisis. Retirement plan fiduciaries face new risks in historically safe investment options In the wake of the market meltdown and the current credit crisis, 401(k) [...]

The political destruction of your 401(k)

First both Presidential candidates advocate breaking the rules so investors can make withdrawals from their 401(k)s without the agreed upon tax penalties. Now powerful democrats discuss rescinding 401(k) tax breaks all together. The first idea would drain 401(k)s of capital, while the second would terminate incentives to save in the first place. House Democrats Contemplate [...]

Money for nothing: candidates curry favor by promising to break the rules

Let’s put the credit crisis on ice for a second and look at the crisis in political leadership made manifest by the plans to break the rules on retirement savings. Both candidates endorse a plan that exposes pensions and 401(k) funds to perhaps the greatest risk of all: temporary panic. It comes to this: both [...]

The “viability” of 401(k) plans: Let the debate begin

A recent article on 401)k)s in The Washington Post was filled with misinformation and twisted comparisons. It leaves the reader with a sense that 401(k)s are traps of some kind from which there is no escape. That’s just flat wrong. Here is the link to the whole thing: Retirement Wreck: Are 401(k)s Still Viable for [...]

$2 trillion vanishes from retirement coffers

Official says pension funds are down $2 trillion WASHINGTON (AP) – The top congressional budget analyst says pension plans have lost as much as $2 trillion in the past 15 months. Peter Orszag told a House panel on Tuesday that the losses are likely to force many workers to hold off on major purchases and [...]

Number of 401(k) hardship withdrawals up, contributions down

When the savers panic: a very special challenge. Investors Pull Money Out of Their 401(k)s Hardship Withdrawals Rose In Recent Months, Plans Say Economic and stock-market tremors are rattling the nest egg. With stocks falling, credit tightening and unemployment rising, small investors have been raiding their 401(k) accounts or slashing contributions to the popular retirement [...]

Wisdom of 401(k) auto-enrollment confirmed, Pension Protection Act’s role questioned

What’s wrong with autonatic enrollment in 401(k) plans? Evidently nothing. One of the most common criticisms of 401(k) plans by the regressive pension plan crowd was that they required too much time and initiative from plan participants. Automatic enrollment sets a course of plan participation prior to participant engagement. The good news is that the [...]