Fixing the 401(k)

Emily Brandon wrote a short blog entry citing a recent Mercer survey which found that the top worry for workers was their retirement accounts.  More than half of workers were worried about retirement which was far great than worries about the health of the company (37 percent) or job security (34 percent).

If employers and participants didn't think their 401(k) plans were broken before, the last 4 months may have changed a lot of people's minds. The current economic crisis has created enormous uncertainty for the future and had a disastrous (and potentially irreversible) effect on retirement plan balances. In the wake of these challenges, many people have been left wondering whether the possibility of retirement is simply an unachievable dream or an all but certain nightmare.

There is a fundamental problem with the retirement plan system in our country and it needs to be repaired and transformed.  The good news is that the inherent problems can be solved and an excellent, low-cost 401(k) plan is well within the reach of every company and employee.  The bad news is that it's going to require fiduciaries to step up and take responsibility either through their own efforts or in response to plan participants who have had enough. It still remains to be seen whether 2009 is finally the year of change.