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401(k) Sponsors Increase Focus On Plan Investments
PSCA has released its 53rd Annual Survey of Profit Sharing and 401(k) Plans which reports 2009 data. This latest survey shows that as markets fluctuated and the 401(k) system came under pressure, plan sponsors responded proactively with an increased concentration on plan investments. Plan investments were more frequently monitored with 64.4... Read More >>
401(k) Day 2010-Celebrating a Decade of Success
Over the last 10 years, a period some suggest is a lost decade for investors, the employer-sponsored defined contribution system has helped American workers set aside an enormous amount for their retirement. In 2000 there was approximately $2.4 trillion dollars in private employer defined contribution plans. By the end of 2009 that amount had... Read More >>
Turning a Molehill into a Mountain-401(k) and the Media
Last weekend I was confronted by the power of the media to shape public opinion. It was scary. On Saturday I attended a reunion of employees of my former employer. Because of what I do the conversation turned to the 401(k) system. Every one of the 80 people there was convinced 401(k) participants had begun drawing down their 401(k) assets. Their... Read More >>
DC Limits and Profit Sharing
When I first joined PSCA there were many DC plans where eligibles received a 15%-of-pay employer profit sharing contribution. For those who wistfully recall this earlier era and wonder why this is no longer true, it results from changes to the federal contributions limitations structure. Or The culprit is a combination of the compensation limit,... Read More >>
ETFs and 401(k)s
There has been a good deal of discussion about ETF's by plan sponsors. First, it is incorrect to diminish the transaction costs of ETFs in a 401(k). Every ETF transaction generates a commission. Each year there are 24 $150 deposits into the plan invested in 4 different investments for each participant in a typical 401(k). Assuming the participant... Read More >>
What I Would Tell the Deficit Reduction Commission
The collection of Federal Government incentives encouraging us to set aside money for retirement (private sector DC and DB plans, federal, state, and local pension plans, 403(b) and 457 plans, the Federal Thrift plan, individual and employer-sponsored IRAs and all non-IRA fixed and variable annuity reserves at life insurance companies) is the... Read More >>
Managing The Transition - Can't Wait Until Age 64 Years And 11 Months
Every day I am asked how the recent volatility of the stock market has affected the 401(k) plan participants. My answer is most plan participants are in it for the long haul where dollar cost averaging smoothes volatility and fluctuation in the marketplace is a normal part of equity investing. Thus, most participants’ long-term retirement... Read More >>
401(k) and Young Savers
Assets in defined contribution arrangements grew from $2.45 trillion in 1994 to $8.23 trillion by the end of 2009. Between their 401(k)s, 403(b)s, 457s profit sharing plans, ESOP’s and IRAs, which house the rollovers, American workers will eventually have more than $15 trillion to draw on during their retirement years. Contrast this to the $2... Read More >>
Retirement Savings - Let's Get the Revenue Effect Right
Retirement savings is the best federal tax expenditure because it is not tax expenditure. For fiscal years 2008 -- 2012, the Joint Committee on Taxation estimates that the Federal Government will forgo $626 billion in revenue as the result of contributions and accumulations in employer-provided retirement programs. However, unlike other tax-free... Read More >>
Stable Value at Risk: It's The Unintended Consequences
The House and Senate have passed different versions of HR 4173 that create a new regulatory framework for the financial services industry. The two chambers are currently attempting to meld their differences into a unified “conference report” that will be approved in each chamber and sent to President Obama for his signature. They hope to complete... Read More >>