From The New York Times:
NEW 401(k) regulations that take effect next month will sharply alter the rules of the game — at least for some employees.
The Labor Department devised
the regulations, seeking to bolster the retirement savings of eligible
workers who don’t currently participate in their companies’ 401(k)
plans. And some financial experts say the new rules may eventually lead
to new investment options for many current participants.
The new
regulations are complicated. But, in a nutshell, they were intended to
meet two objectives. First, regulators wanted to push more Americans to
invest in 401(k)’s. And, second, they wanted them to invest more of
their money in stocks, which have outperformed bonds and money markets
over the long term. To meet those goals, the new rules make it easier
for employers to automatically enroll employees in their plans, though
they aren’t required to do so. The default investment for auto-enrolled
employees will include stocks, though workers who want to choose on
their own will have other options.
There is plenty of evidence,
both anecdotal and statistical, that workers save more for retirement
when much of the decision-making is taken out of their hands.
(continue reading)
Posted on
Monday, November 12, 2007
by Brad Neese