Critical content for our clients and partners.
Many major brokers, banks and financial advisors take revenue sharing payments - legal kickbacks that mutual fund companies pay to reward sales of particular funds. / Morgan Stanley and other brokerages no longer offer low cost mutual funds from Vanguard Group, which doesn’t make revenue-sharing payments.
Interesting take on the "Time segmentation" or "Bucket" approach to retirement savings.
The complaint's legal journey included a hearing before the U.S. Supreme Court. Justices ruled unanimously in May 2015 that sponsors have a "continuing duty" to monitor investments and "remove imprudent ones," and sent it back to the lower courts.
The vast majority of HR representatives likely have no idea of the significant liability they are exposed to in their duties regarding their company’s 401(k). HR representatives are responsible for a number of duties, but one important task they should never overlook is the management of 401(k) plans.
A cool $1 million has long been considered the gold standard of retirement savings. These days, it's only a fraction of what you will really need.
Timing the market because it seems like the top is near is usually disastrous for returns, but sentiment may have reached extremes after so many false alarms
5-star funds using the Journal’s chosen methodology produce better future star ratings than do 4-star funds, which in turn are better future performers than 3-star funds, which in turn better 2-star funds, which better 1-star funds. (Five-star funds also meaningfully outperform the 1-star funds over the subsequent three- and five-year periods.) A rational take on these numbers would say that the stars add value. Picking higher-rated funds leads to better future results.
No need to worry! As a Registered Investment Advisory company, 401k Investment Professionals acts as a fiduciary on all plans we support. If you have questions about what the Empower change means to you, give us a call.
If you want to hire a financial planner who charges only fees, you will have to ask probing questions. Start with these: Are you a fiduciary, who must always act in my best interests? Will you put that in writing? Does anybody else ever pay you to advise me and, if so, do you earn more to recommend certain products or services?
If the answer to the last question is yes, “fee only” is just talk, and you should walk.
The Financial Planning Association says a current Senate amendment to the Republican tax bill could make it more difficult for older Americans to save enough for retirement by limiting their ability to make so-called “catch-up” contributions to 401(k) plans.
58% of people don’t know their retirement plan charges fees
The lawsuit alleges the broker-dealer and several employees overseeing the retirement plan breached their fiduciary duties by selecting high-cost mutual funds when identical, lower-cost ones were available, choosing “an unreasonable number” of high-risk investment options, and including a “poorly performing” money market fund in place of a stable value fund.
What you don't know about 401(k) fees can cost you plenty - CNBC
...they focused on three areas: companies' use of retail share classes of mutual funds, when identical, less-expensive institutional share classes were available; uncapped, asset-based revenue-sharing fees paid for record-keeping services; and imprudent, historically poor-performing investment options.
These charges constituted a breach of fiduciary duty under the Employee Retirement Income Security Act of 1974, according to the lawsuits.
Thirty-one percent of working U.S. adults plan to keep working until they’re 68 or older, according to a May Gallup poll cited by the paper. And 38% of workers think they’ll retire at 70 or later, according to a March Employee Benefit Research Institute study cited by the Journal.
But in practice only 4% of retirees worked until they turned 70 or older, according to the Employee Benefit study. And the average age retirees actually stopped working was 61, according to the Gallup poll cited by the paper. Meanwhile, just 7% of retirees polled by the Federal Reserve said they had income from a job, the Journal writes.
The plaintiff claims unreasonable fees paid to the plan record keeper, Mercer HR Services Inc., lost $8 million in aggregate retirement savings over the proposed class period, Aug. 19, 2010 through the present.
Further, the plan offered high-cost mutual fund share classes when lower-cost alternatives were available for identical funds, leading to $13 million in excessive fees, according to the complaint. Participants allegedly would have saved tens of millions more dollars if assets were invested in collective investment trust funds and separately managed accounts, the plaintiff claims.
