401(k) plans have received a lot of press and attention of late. Recent implementation of Department of Labor regulations has resulted in some changes for 401(k) plan participants and plan sponsors.
Here are some recent articles that offer some critiques and issues facing 401(k) plans today.
"Bad behavior persists in 401(k) accounts"
In an April 2013 article, author Linda Stern highlights how many 401(k) participants have missed much of the market rebound since 2009 due to their own ‘emotionally driven’ behavior. The article mentions one positive trend in 401(k) plans since 2009 – the elimination of large stakes in company stock within 401(k) plans. A 401(k) plan can be your largest financial asset and it is crucial that you are receiving the information and advice you need when it comes to your 401(k).
Full article: http://reut.rs/18tNaOG
“Ban ‘active’ fund from 401(k)s, IRAs”
In March 2013, Alicia Munnel of the Center for Retirement Research at Boston College wrote a short article highlighting her position for why ‘Investments in tax-favored accounts should be limited to index funds’. She found that there is not a correlation between the high fees of actively managed funds and higher investment returns. Her position goes so far as to suggest ‘banning actively managed funds from tax favored plans’.
Full article: http://on.mktw.net/12Vcojg
“Cover: Delegation of Duty”
This article delves into the selection and monitoring of a 3(21) or 3(38) fiduciary assigned to a company 401(k) plan. Plan sponsors need to do their homework when outsourcing this important role and have a prudent process in place to select and monitor the plan fiduciary. Recent laws have changed where the responsibility falls and it’s not as easy as signing away the role.
Full article: http://bit.ly/11j9nPe