The Sixty Minutes segment on 401(k)s that slammed them as being mediocre offerings with hidden fees is not the only shot being taken at the defined contribution modelnot by a long shot.
A Chicago Tribune column notes that Americans have lost approximately $600 billion in their retirement savings through 401(k) plans, and are putting them to blame.
Its certain, then, that Congress will continue to scrutinize 401(k) plans, writes columnist Gail Marks Jarvis. It seems 401(k) plans are being hauled out by Congress for a public stoning, she writes. Its the catharsis many Americans need due to what many say are excessive fees and investment choices that are not always in their best interest.
As the Employee Benefit Research Institute notes, when the financial crisis began, 25% of Americans between the ages of 55 and 65 had 90% or more of their money in stock funds, and undoubtedly have suffered greatly, losing nearly half of their savings right on the eve of their retirement.
In addition, target-date funds have not held up well, particularly 2010 funds, which lost 26% of their value on average.
EBRI found in a recent survey that 58% think of the money managers in their 401(k) plan are gambling, and only 13% of those near retirement are confident they will live out truly golden years.