401k Plans

If you're lucky enough to have the newest kind of 401(k) plan, experts say you're off to a good start even if you don't lift a finger. The hot trend in retirement savings plans is making the 401(k) run on autopilot. Employees are enrolled automatically. The plan decides how much you should contribute and simply takes the money out of your paycheck. How your money is invested is also decided for you. And your contribution amounts and investment allocation automatically change over time.

A political push for greater disclosure of fees in 401(k) retirement savings plans gathered steam Tuesday, as an influential Democratic lawmaker said he planned to shine light on whether an array of service firms were "dipping into other people's money" without good cause. "We have to ask whether all these fees are necessary, and we have to examine whether they are undermining workers' retirement security," said Rep.

Goodyear Tire & Rubber Co. said it would scrap its pension program for current workers and raise retiree healthcare payments to save as much as $90 million annually. In 2009, Goodyear will replace defined-benefit pension plans with 401(k) programs with matching contributions. Corporate salaried and retail store retirees will pay more for health benefits beginning next year, and some insurance benefits will be canceled, Akron, Ohio-based Goodyear said.

The Labor Department has filed suit against executives of two defunct textile firms, including one in Santa Monica, demanding the return of more than $100,000 in employee contributions to the firms' 401(k) plan. The suit, filed in U.S. District Court in New York on Thursday, alleges that Richard Haik and Mitchell Ostrover failed to forward employee contributions and loan repayments to the 401(k) retirement plan for employees of Beverly Trimming Co.

Federal regulators should boost their oversight of 401(k) retirement plans and adopt reforms to ensure full disclosure of hidden costs that can cut deeply into the savings accrued by millions of American workers, a government report recommended Thursday. With companies rapidly abandoning traditional pensions, 401(k) plans have become a cornerstone of retirement security for an estimated 47 million people.

For insurance agent Steve Adams, 51, the resentment began two years ago. As he worried whether his stagnant 401(k) account would be adequate for retirement, his wife's employer ended her pension plan, forcing her to rely on a 401(k) as well. Then New Jersey lawmakers raised his property taxes to maintain state workers' pensions. Last spring Adams joined a taxpayer group called Americans for Prosperity that is seeking limits on government employee pensions.

Shannon Scrivens discovered a surprise in her paycheck earlier this year: It went down. But the mother of four was happy with the modest pay cut, because the money she missed was going into a retirement savings plan. "I noticed that the 401(k) appeared one day in my pay stub and I was thrilled with it," said Scrivens, 35, as she took a break from her loading-dock job at a sprawling Costco warehouse near Washington Dulles International Airport.

Investigators for New York Atty. Gen. Eliot Spitzer are conducting a wide-ranging probe of public and private retirement plans, a spokesman said Tuesday, and are expected to reach a legal settlement soon with the state's teachers union over its endorsement deal with a major insurer.

Figuring out what you're paying for your 401(k) isn't easy. Here are some pointers. Mutual funds, in which most 401(k) money is invested, collect a percentage of your account balance for management fees and operating costs. This charge, called the expense ratio, can be found in fund prospectuses and on many fund-company websites. In contrast, fees related to the administration of your 401(k) -- for record keeping, employee education and other services -- are harder to find.

There's an old saying on Wall Street: Stocks aren't bought; they're sold. The adage, which pays homage to the persuasive powers of salespeople, applies to some 401(k) plans as well. In the crowded marketplace of retirement plans, insurance and investment brokers often serve as matchmakers, helping employers find insurance companies to run their 401(k)s. Typically, the broker collects a commission from whatever insurer gets the job.