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401(k)s Investment Products

News

Revenue-Sharing Fees Inconsistent in 401(k)s

Some funds have high revenue-sharing fees, while others have none at all.

Match or No Match, 401(k) Contributions Are Critical

Advisers are recommending that investors continue to make contributions to their 401(k).

Group Annuities May Be Inappropriate for 401(k)s

Critics cite lockups, higher fees.

U.S. Older Population to Jump from 13% to 20% by 2030

The aging population will put a strain on government programs and slow growth.

Investor Advocate Slams Revenue-Sharing, 12b-1 Fees

Mutualfundreform.com also says 401(k)s have an implied promise of providing retirement security.

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Articles

Target-Date Fund Hearing Focuses on Disclosure

At the hearing on target-date funds that the Department of Labor and the Securities and Exchange Commission held in Washington last Thursday, the focus was on better disclosure of holdings. Even though the makeup and glidepaths of target-date funds vary so considerably, as proven by the range of minus 7% to minus 41% that 2010 target-date funds delivered in 2008, fund executives resisted government-mandated caps on holdings.

Providers Look for Auto Rollover Solutions to Include Job Changers

WASHINGTON - With 47% of 401(k) plans now using automatic enrollment, the programs have helped get millions of new workers enrolled to start saving early for retirement, but industry experts say the automatic nature of these plans needs to extend to helping 'hands-off' investors when they change jobs. When an employee leaves a job, he or she can choose to roll over their money into an individual retirement account (IRA), take a lump-sum payment minus taxes and a 10% penalty, or do nothing and leave their money in the 401(k). Sir Isaac Newton would predict the latter.

401k Fee Transparency Push Could Increase Fees, Confusion

WASHINGTON - Many investment industry leaders are worried that the proposed 401(k) fee disclosure regulations currently being pushed through Congress will actually increase the fees investors pay and increase their confusion. 'Regulators feel they need to add nuances to 401(k) fee disclosure, but what's it going to cost the industry to comply?' asked Fred Teufel, a principal of institutional retirement plan services at The Vanguard Group, during the Society of Professional Asset-Managers and Record Keepers' conference titled 'Retirement Plans at a Crossroad' held here last week at the Mandarin Oriental Hotel. 'We spend an increasing amount of our budget on regulatory compliance,' said Barbara March, executive vice president of workplace investing for defined contribution plan services at Fidelity Investments. 'This reminds me of redemption fees. The cost of complying with the rules was more than anyone would have been hurt by the fees.'

Sponsors Continue to Add Many Features to 401(k)s

Although there have been reports of one-third of employers cutting back on or eliminating 401(k) matches, for the most part, they have continued to add other features to the plans to increase participation and investment rates, Charles Schwab found. And that has helped most workers stay the retirement savings course. In fact, of the plans that Schwab manages, participation increased in 2008 to 77%, up from 73% from the year before. Plans with between 500 and 1,000 participants displayed the highest participation rate (88%). A majority of employers, 70%, continued to offer a 401(k) match in 2008, down from 78% in 2007. Of those that did offer a match, only 8% reduced it.

401(k)s Will Supplant Pensions in Our Lifetimes

How far the 401(k) has come since employers first introduced the savings plan in 1981. And how far it has yet to go. 401(k)s, I predict, will become universal in our lifetimes, supplanting all forms of pension plans. The first time I heard about 401(k)s, when I entered the workforce in 1982, was from a fellow classmate from the University of Pennsylvania, who was familiar with then-esoteric 401(k) section of the IRS code (then being touted merely as a tax benefit), since she worked as an accountant for Coopers & Lybrand.

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