Practice

The Internal Revenue Service has decided to keep contribution limits for 401(k)s, IRAs and other retirement accounts unchanged in 2010, rather than lowering them, as some had feared due to negative inflation. The Labor Department reported Thursday that the consumer price index has fallen 1.3% over the past 12 months.

To prevent other target-date investors from being burned as so many were in 2008, when the average 2010 and 2015 fund lost 25% of its value or more, more advisers are telling their clients that they need to look closely at the asset allocation and glidepaths of these funds so that half of their portfolios are not exposed to stocks on the eve of their retirement.

The Securities and Exchange Commission has tapped Adam Storch to be the managing executive of the newly created Division of Enforcement.

More than three-quarters, 77%, of 401(k) investors have not made any changes in the past 12 months leading up to April, J.P. Morgan Retirement Plan Services found in a survey titled “Anything But Certain.”

The variable annuity value proposition appears to be eroding, as mutual fund sales outpaced those of annuities during the second quarter, and more of the same is expected through next year.

While it’s good news for investors that a majority of mutual fund boards have adopted the best practices advocated by the Investment Company Institute and the Independent Directors Council, some critics believe those suggested practices should be mandatory.

Workers who had already been investing in their 401(k) for at least five years through 2008 saw their balances drop an average of 24% last year, compared with the S&P 500's sharp 37% decline, the Investment Company Institute and the Employee Benefit Research Institute said.

BOSTON - As tax experts at mutual fund companies hurry to prepare their fund accounting systems before newly mandated changes to federal cost-basis reporting rules take effect, they are finding they could use a little help and guidance from the government.

As exchange-traded funds continue to grow in scope and popularity, investment experts warn that some products, such as leveraged and inverse ETFs, may be too dangerous for all but the most experienced hands.

In an open letter to investors on its website, ProFunds says that investors “should fully understand how they work before investing.”