Retirement benefits

The 30th anniversary of the first 401(k) savings plan which I designed is rapidly approaching on Jan. 1, 2011, making this an appropriate time to briefly consider how 401(k) has impacted our retirement system.

The majority of dollars that wealthy investors formerly allocated to workplace-based retirement accounts like 401(k)s and 403(b)s are now being poured into individual retirement accounts, according to a report by Cogent Research LLC.

A recent survey of 401(k) practices found that 68% of employers allow employees to contribute 25% or more of their earnings into their 401(k) plan, according to marketing research company Business and Legal Resources.

While 45% of pre-retirees say they expect to rely on 401(k) plans or individual retirement accounts to fund their retirements, the number is shrinking, according to a new Gallup poll.

The Insured Retirement Institute on Thursday sent a “broad, comprehensive” response to the request for information on lifetime income that the U.S. Departments of Treasury and Labor recently issued.

The Department of Labor announced that beginning in August, it will require asset management firms to provide further information on the risks and benefits of investing in target-date funds, including details on their glidepaths, to employers and employees.

Assets in 401(k) plans and other retirement accounts are up 18% from a year ago and have nearly erased losses from the recession as investors continue to pump money into their plans and take advantage of lower prices, according to a report from the Spectrem Group.

At MetLife’s sixth annual benefits symposium in Washington this week, Treasury and Department of Labor officials discussed the difficulties of including annuities in 401(k)s. The two agencies have asked the public for comments through May 3 on including lifetime income solutions in employer plans.

Charles Schwab is encouraging people receiving tax refunds to resist the temptation to use the money for impulse purchases, but, rather, to use the money for long-term financial goals, especially retirement, and paying down high-interest debt.

Collective investment trusts are growing in popularity among large companies seeking to provide employees with lower-cost retirement savings options, but some experts worry that these plans don't offer investors enough disclosure.

Fidelity Investments expects sales of its 401(k)s to continue to increase through third-party financial advisers to small and midsized companies-and the company plans to reduce fees to gain additional share. In August, Fidelity plans to switch its Advisor 401(k) platform to a system where the adviser receives a flat fee from Fidelity instead of several different fees in the form of 12b-1 fees.

A few employers are beginning to offer eldercare as a benefit, realizing that many Baby Boomers have parents in need of a much-needed lifeline. In fact, 19% of Americans over the age of 18 are caring for someone 50 or older, according to the National Alliance for Caregiving.

This year marks the 30th anniversary of the 401(k), the revolutionary retirement savings vehicle that has been annihilating pension plans, empowering individuals to take part in the stock market-and, sadly, that left retirees with the misfortune of leaving the workforce in 2000 or 2008 very badly off.

This year marks the 30th anniversary of the 401(k), the revolutionary retirement savings vehicle that has been annihilating pension plans, empowering individuals to take part in the stock market-and, sadly, that left retirees with the misfortune of leaving the workforce in 2000 or 2008 very badly off.

Be it the dismal disappointment of seeing their 401(k) balances fall, loss of a job or a wage cut, 48% of Americans are savings less for retirement, according to a Country Financial survey of 2,340 working Americans.

While workers’ confidence in their ability to retire and at least pay for basic expenses has rebounded since the start of the recession, Americans clearly are not setting their expectations high enough.

Bona fide 401(k) investment advice could finally become standard practice in defined contribution plans, thanks to the Department of Labor's proposed rules limiting the actions of investment professionals who take commissions.

Fidelity Investments expects its retirement assets to continue to increase this year as both employers and employees become more engaged with 401(k) plans.

To enable portfolio managers of its target-date funds to respond more nimbly to extreme market volatility, starting in April, AllianceBernstein will allow these funds to move up to 20% of their assets from equities and real estate investment trusts into bonds and cash.

Prudential Financial reported 2009 year-end earnings of $3.411 billion, or $7.63 per common share, a sharp improvement from the $1.14 billion loss, or $2.53 per common share, in 2008.