Employee benefits

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.

CAMBRIDGE, Mass.-In the race to capture rollover retirement assets, retail banks have been somewhat of a sleeping giant.

CAMBRIDGE, Mass.-Retirees and their broker/dealers have one thing in common: they both want advice.

Recently, the National Bureau of Economic Research issued a report debunking the theory that as the 77 million Baby Boomers begin to turn 65 in 2011 and cash out of their stock and bond holdings, the markets will spiral into a bear market. The bureau's argument is that 401(k) assets currently represent only a small fraction of people's retirement portfolios, and as 401(k)s continue to grow markedly in coming years, the influx of new investments will buoy the markets.

Recently, the National Bureau of Economic Research issued a report debunking the theory that as the 77 million Baby Boomers begin to turn 65 in 2011 and cash out of their stock and bond holdings, the markets will spiral into a bear market. The bureau's argument is that 401(k) assets currently represent only a small fraction of people's retirement portfolios, and as 401(k)s continue to grow markedly in coming years, the influx of new investments will buoy the markets.

An intended class-action lawsuit filed in Illinois in mid-May has the potential to challenge how all state Treasury offices apply tax deductions for contributions to in-state, versus out-of-state, 529 college savings plans.

Score one for the mutual fund industry.

NEW YORK-Including exchange-traded funds in defined contribution platforms isn't just a good idea for plan sponsors, it's darn close to a fiduciary duty, said panelists at a recent ETF summit held here.

Score one for the mutual fund industry.

Money Management Executive this week has released a comprehensive, unique set of 529 data to help mutual fund companies, financial advisers and their clients more accurately plan college savings in both the short- and long-term.

As Money Management Executive launches this year's set of State Tuition Index and Datasheet reports, a new paradigm for evaluating college savings plan is introduced. With MME's TuitionMAR (minimally acceptable return) statistics, a set of core absolute return benchmarks is now available to assist mutual fund companies, 529 plan sponsors and financial planners in evaluating the ongoing success of a college savings plan investment.

NEW YORK-Future generations are going to be saddled with tremendous college debt if the financial industry doesn't do a better job of talking to families about the importance of saving for their children's higher education, according to panelists at an AllianceBernstein Investments event here last week, "Perspectives on College Savings."

WisdomTree Investments, an exchange-traded fund firm started nine months ago, is gearing up to enter the retirement market. The New York firm has assets of $3.2 billion in its 36 ETFs, and it plans to make the funds available to the 401(k) marketplace shortly, said Al Shemtob, its director of retirement services.

The Bush administration pledged last week to improve fee disclosure in 401(k)s. The Department of Labor's Employee Benefits Security Administration is now accepting ideas on how to do so from the public and the investment management industry. The deadline for comments is July 24.