Proposed 401(k) Reforms Stir Debate March 02, 2010 (Dow Jones) If the U.S. Labor Department has its way, the rules governing who can give Americans investment advice about their 401(k)s and IRAs, and how that advice gets delivered and paid for, soon will change. But financial advisors and others disagree dramatically on whether the proposed rules will help or harm investors.
The Obama administration's aim is to eliminate the problem of advisors with hidden conflicts of interest giving slanted advice to unsuspecting retirement savers. But will the proposed rules achieve that goal? Like many things in life, it depends on who you ask.
Most independent, fee-only advisors who make a living giving investment advice to 401(k) plan participants and IRA owners are praising the proposed rules. Broker-dealers, meanwhile, are apoplectic. Others are somewhere in between.
According to Vice President Joe Biden, who unveiled the new rules at the White House last week, "the first of the two rules would ensure workers receive unbiased advice about how to invest in their individual retirement accounts or 401(k) plans. Read the entire article here |
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New 401(k) Transparency Rules Proposed March 01, 2010 (Dow Jones) The U.S. government Friday proposed regulations designed to enhance transparency for millions of workers covered by 401(k)s, pensions and other retirement plans, offering long-awaited guidance for investment firms.
Since the Pension Protection Act of 2006 was passed, potentially creating a market that would permit investment advisors to recommend their own funds, some firms have been awaiting further guidance.
One of new rules would ensure that workers receive unbiased advice about how to invest in their individual retirement accounts or 401(k) plans. If adopted, it would provide safeguards to prevent investment advisors from slanting advice for their own financial gain. It would also require that investment advisors disclose their fees, and that computer models used to offer advice be certified as objective and unbiased Read the entire article here |
Labor Dept.'s 401(k) proposal could rock pension advice businessBy Jessica Toonkel Marquez
February 26, 2010 The Labor Department today released proposed regulations that prohibit financial advisers giving advice to 401(k) plans, or their employer or the employer's affiliates, from receiving extra compensation because the plan sponsors bought a product recommended by the adviser. “They can't take advantage of the exemption if anyone in that chain gets compensated [from the advice provided,]" Assistant Labor Secretary Phyllis Borzi said today in a conference call discussing the proposed rules. Read the entire article here |
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Eight in 10 firms plan to restore 401(k) match: SurveyRobert Powell's - The Retirement Blog Happy days are here again. Yes, indeed, some 80% of employers that suspended or reduced their company match in 2009 are planning to restore it in 2010, according to Hewitt Associates, which on Monday released its Hot Topics in Retirement survey. What’s more, the Hewitt’s survey showed that about half of employers that do not already offer automatic rebalancing are very or somewhat likely to add it to their plan in 2010 and nearly four in 10 are very or somewhat likely to add automatic contribution escalation. Read the entire article here |
The Return Of The 401(K)By Linda Stern | Newsweek Web Exclusive
Feb 2, 2010 Companies are starting to match employee contributions again. But will they be as generous as they were before the recession?
What do Ford Motor Co., FedEx, Eastman Kodak, and AARP have in common? They all started 2010 by giving back what they had taken away: matching contributions to their employees' 401(k) retirement accounts. In the economic turmoil of 2008 and 2009, roughly 18 percent of companies either eliminated or reduced the contributions they were making to their employee accounts, according to a study by Profit Sharing/401k Council of America, a nonprofit group backed by employers and providers of retirement plans.
Now 5.4 percent of those companies have already restored their matches and 41.3 percent more say they'll reinstate matching contributions in the first quarter of 2010. "Even in this economic period, plan sponsors remain committed to improving their plans," says David Wray, president of PSCA. (The Pension Rights Center maintains a comprehensive list of companies and their latest policies.)
Read the entire article here |
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