Any focus on younger employees in terms of saving for retirement may all be for naught. For these often lower-paid workers, the higher contribution caps for 401k plans may not any practical benefit.
Tag "Harold Evensky"
Plan sponsors need to think about it in these terms: Does it make sense to have a pork-belly ETF on a 401k investment menu? How about orange futures?
If you have any experience in the retirement plan business, some predictions just write themselves. As in “an incredible feeling of déjà vu.”
CITs can only be offered within the confines of a trust relationship. That means the plan itself might be structurally different than one that has an investment menu limited to mutual funds.
Between the IRA Rollover matter and the redefinition of “regular services,” there is no shortage of ways to chip away at the new Rule. What might be one way we can expect to see the industry attack the Rule in front of a judge?
This broader definition of fiduciary may impose a potential hardship on a segment of the retirement industry that has been trying hard to gain a foothold in plan infrastructure.
Of course, to really answer the question of post-retirement middle class stability, we have to understand what “middle class” means. Luckily, there are folks who collect data, which helps with this definition.
The twist is this: The bad news is only a fraction of the people will be able to save $4.3 million for retirement because the average salary is too low. The good news is most people won’t need to save $4.3 million because, thanks to living on a low average salary, they are accustomed to spending far less.
The Biden Rule, like the Trump Rule, does not encourage or discourage the use of ESG criteria when selecting investments. This allows fiduciaries to either adopt ESG principles or ignore them.
The Irony Of Taxing 401k Plans To Save Social Security
Worse, if the “alternatives” alluded to by the paper entail government backed programs like Social Security, this could have a debilitating impact on encouraging people to be responsible for funding their own retirement.