Practice

PALM BEACH, Fla. - Almost a year after new rules governing 403(b) retirement plans for educational and non-profit workers were supposed to take effect, plan sponsors, vendors and third-party administrators are still struggling to comprehend the myriad of changes.

PALM BEACH, Fla. - Most 401(k) and other defined contribution plan administrators and sponsors like the automatic enrollment feature in the retirement savings plans they manage because it gets more people saving earlier, but the involuntary nature of these plans does not diminish the burdens they place on administrators to run them.

Financial services firms are urging Congress to adopt retirement savings reforms in the next few years and are readying products that could profit from them.

Although the recent economic downturn has forced pre-retirees ages 50 to 59 to consider working years longer than they had hoped, their current rate of savings is unlikely to fund the retirement lifestyles they expect, according to the fifth annual Retirement Fitness Survey from Wells Fargo & Company.

Americans, including retirees, are looking to return to stocks to regain the steep losses they suffered in 2008 and are optimistic they will accomplish this, Prudential Financial found in a survey of 1,001 Americans aged 45 to 75 with $100,000 or more in retirement savings.

Although target-date funds could possibly be better designed and perhaps have less disparity between their equity exposure and glidepaths, they are not to be held responsible for the current retirement shortfall many people are now facing, according to Manning & Napier. Rather, no mutual fund could adequately shield investors from the near collapse of the U.S. financial system, according to the firm.

Putnam Chief Executive Officer Robert Reynolds is once again sounding the call for a new approach to 401(k) investing, inclusive of annuities and other retirement income products. This time, he is asking Washington to create a national insurance charter that will ensure consistent regulation for assured income products.

Plan sponsors are becoming more aggressive about helping their workers save for retirement, and even investment advice is now commonly offered, Hewitt Associates found in a survey of 300 mid- and large-sized companies.

With investors and employers alike still shaken by retirement plan losses, despite the market's rebound since March, Prudential Financial is hoping a bundled package of products inclusive of guaranteed retirement income can help it draw assets from a skeptical marketplace.

Last week's Supreme Court case has once again brought mutual fund fees to the national spotlight, but a decision by the court might not come for several months, if it comes at all. And judging from the justices' comments, they appear reluctant to get involved in the day-to-day workings of fund companies and more inclined to trust the judgment of fund boards, the purview of the Securities and Exchange Commission and the workings of the free market.