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401(k) plans

Radical thinking from...BusinessWeek?

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A timely and provocative op-ed by BusinessWeek's contributing economics editor Chris Farrell flatly states, "Keep Wall Street Out of the Retirement Business."  Farrell goes on to ask:

Question is, in light of the current turmoil in the financial markets, should Wall Street manage any of our long-term retirement savings funds? Is the 401(k) plan, which has become the main retirement savings vehicle for the American worker over the past three decades, a mistake? The case for rethinking the 401(k) as a pillar of retirement savings is compelling. More...

More on the meltdown

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What a week.  The Lehman Brothers bankruptcy, Merrill Lynch's sale to Bank of America, and the government rescue of AIG were just the latest upheavals in this churning Subprime Summer.  I've been getting calls every day from reporters, wanting to interview people who are concerned about their 401(k) accounts.

People are right to be concerned.  For many American workers, a 401(k) account will be their only source of retirement income besides Social Security.  While one should expect market fluctuations to affect their account balances, no one likes to see their 401(k) take a nosedive. More...

How does the Wall Street meltdown affect my pension?

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In the past few days, large companies on Wall Street have been closing left and right, making the people who work at these companies jittery about many issues, including their retirement security.

The good news for these employees is that the money in their pension and 401(k) plans is protected from creditors, so that even when a company goes into bankruptcy, they don't have to worry about their retirement money being used to pay back debts instead. More...

How much does a 401(k) really cost?

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When I was head of the Employee Benefits Security Administration (the Department of Labor agency charged with protecting pensions) during the Clinton administration, I became concerned about whether or not people who had 401(k) plans truly understood how much they were paying in fees and what those fees were for. So in 1997 and 1998, we held hearings and issued a report [PDF] on the issue.

A couple of months ago, I decided to take another look at the 1998 report to see what had changed in the last 10 years. More...

Robbing your retirement piggy bank

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In an earlier blog post, we discussed efforts in Congress to make it easier for people to withdraw money from their 401(k) accounts to save their homes from foreclosure. Such withdrawals are part of a larger problem with 401(k)s known as "leakage" (what a lovely name!) – loans, early withdrawals, and lump-sum payouts that reduce or deplete a worker’s retirement savings account long before the worker actually retires. Between withdrawal penalties, interest charged on loans, and the overall reduction in their retirement savings, "leakage" has long-term consequences that many workers aren't aware of until it's too late. More...

Cashed Out: Congress might make it easier for people to dip into their 401(k)s

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In down economic times, it isn’t uncommon for people to feel the urge to dip into their assets to help make ends meet. Therefore, it isn’t a surprise to hear that more and more people are borrowing from their 401(k) plans for a little extra cash. Some people are even paying hefty taxes to permanently withdraw money from their 401(k)s . More...

Does Gannett's pension freeze leave its employees in the cold?

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You may have read that last week newspaper publisher Gannett announced that it will freeze its pension plan for all employees as of August 1, 2008. The company announced the freeze and details of its plan to “enhance” the company 401(k) in a memo sent to employees.

Gannett is just one of many employers that we have added to our growing list of companies that have changed their defined benefit plans. More...

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