Employee benefits

Employers and employees at small businesses don't see eye to eye when it comes to 401(k)s, according to a Harris Interactive survey commissioned by ShareBuilder Advisors, a 401(k) administrator that specializes in serving small companies.

Legg Expects to Announce New Chief Executive Soon; Says Search is Progressing

After Two Month Suspension, China Again Approving Mutual Funds

The Department of Labor has decided not to include stable-value funds as one of its recommended default options for 401(k) plans under the Pension Protection Act. Instead, the DOL is advocating balanced funds, lifecycle funds and a professionally managed, diversified portfolio as the default choices.

While most 401(k) investors hardly give a thought to employer matches-and even employers usually don't promote them heavily to employees-an innovative investment solution from Barclays Global Investors of San Francisco specifically designed for company matches might finally generate some interest in this neglected company perk.

WisdomTree Retirement Services, a unit of WisdomTree Investments of New York, is the latest firm to launch a platform designed for the 401(k) market that offers plan sponsors a combination of ETFs and mutual funds, or a selection of all ETFs combined into preset portfolios.

Automatic enrollment and automatic escalation will be the two most significant developments of defined contribution plans over the next three years, according to 401(k) plan advisers polled by Putnam Investments.

Lifecycle funds are now taking another punch, and while this one may not be fully merited, it is one that fund companies might want to consider as a roadmap to improving such funds' performance and marketability.

Lifecycle funds are now taking another punch, and while this one may not be fully merited, it is one that fund companies might want to consider as a roadmap to improving such funds' performance and marketability.

Parents certainly are aware of the need to save for children's college education, but not all are stashing away money in appropriate investment vehicles, such as 529s that are tax-free.

The "Show Me" State of Missouri is about to show the 529 college savings plan marketplace just how innovative it can be.

The Department of Labor estimates that automatic enrollment in 401(k) plans, as protected under the Pension Protection Act, will add between $45 billion to $90 billion a year to the plans, which had $3.6 trillion in assets under management in 2006, according to the Investment Company Institute.

So-called target-date and target-risk asset allocation funds portend to make investing easier for 401(k) participants, but the proliferation of these products in recent years can make choosing which to offer a headache for sponsors.

The Department of Labor estimates that automatic enrollment in 401(k) plans, as protected under the Pension Protection Act, will add between $45 billion to $90 billion a year to the plans, which had $3.6 trillion in assets under management in 2006, according to the Investment Company Institute.

With a new Internal Revenue Service requirement about to require 403(b) sponsors to assume fiduciary duty, much as 401(k) sponsors do, and pare back the number of offerings, the sponsors are inevitably going to scrutinize their plan administrators.

The Pension Protection Act ushered in far-reaching changes to 401(k) plans, including fiduciary protection for providers using automatic enrollment and default investments, and making permanent higher contribution levels and catch-up contributions for older workers.

Implementing automatic enrollment and auto-escalation in 401(k) plans is a start in the effort to push employees to prepare for retirement, but it may not be enough.

Workers are starting to catch on to all the ominous warnings of what will happen if they don't save enough for retirement, and the average 401(k) account increased 17% in 2006 from the previous year.

Bank and trust-controlled collective investment trusts (CITs) may give retail mutual fund companies a run for their money in 401(k) and other defined contribution plans.

Automatic 401(k) enrollment programs are making headway among corporations across America and are expected to gain increasing traction, helping more investors be better prepared for retirement, according to Fidelity Investments.