Charles Schwab has long been a leader in low-cost retail investing. Now, it’s gearing up for a run at the 401(k) market by hitching its wagon to two ideas whose time may have come: low-cost passive investing and investment advice for plan participants. Schwab has never been a major player in administering 401(k) plans for [...] [...more]
Automation of workplace retirement plans has spread rapidly in recent years. But automation has its drawbacks. The Pension Protection Act of 2006 (PPA) set the stage for retirement plan sponsors to step up automatic opt-in enrollment for new workers, and it’s resulted in much higher plan participation rates. Growing adoption of other automation features have [...] [...more]
It may feel like as though 401(k)s have been around forever, but they’ve actually only been around for the past several decades. Until the 401(k) came along, if you had a workplace retirement plan it came in the form of a traditional defined benefit pension. The 401(k) actually got started as a loophole in tax [...] [...more]
Target date funds (TDFs) have taken off in recent years as more workplace retirement plans install automation options. TDFs invest in a mix of assets and aim to reduce equity exposure as participants approach retirement. The basic idea is good, considering that many investor portfolios suffer from benign neglect when it comes to rebalancing, fund [...] [...more]
Automation of workplace retirement plans has spread rapidly in recent years. But don’t make the mistake of taking your foot completely off the gas pedal if your employer has installed retirement cruise control. The Pension Protection Act of 2006 (PPA) set the stage for plan sponsors to step up automatic opt-in enrollment for new workers, [...] [...more]
