The claim (I’m looking at the 6th Circuit opinion) is that the people running the retirement plan knew or should have known that Fifth Third stock was overvalued in 2007, and they breached their fiduciary duty to plan participants by continuing to offer company stock as an investment option and by failing to sell the company stock that was owned by the plan.
The underlying problem with financial advice—besides the fact that most of it is wrong, conflicted (in the conflict of interest sense), or covert marketing—is that, even in the best case, it rarely works.
I looked up the top ten talk radio shows by audience. Nine of them were unabashedly right-wing, politically oriented shows. The tenth was Dave Ramsey.
In the past, I’ve used the Federal Reserve’s Survey of Consumer Finances as my source for data about the inadequacy of many households’ retirement savings. Poterba has a new, perhaps even more stark snapshot:
it’s a myth to say, as America Saves does on its home page, “Once you start saving, it gets easier and easier and before you know it, you’re on your way to making your dreams a reality
Floyd Norris says some sensible things in his column from last week on the retirement savings problem: Defined benefit pensions are dying out, killed by tighter accounting rules and the stock market crashes of the 2000s.
In his recent State of the Union Address, President Obama unveiled something new: a retirement savings account to “help” Americans build a nest egg, coining it the “MyRA.”
In his State of the Union address Jan. 28, U.S. President Barack Obama announced he will direct the Treasury Department to create “myRA” retirement accounts.
myRA accounts will allow people to invest in government savings bonds that guarantee – according to the president – ” a decent return with no risk of losing what you put in.”
Don’t believe it.
This is a syndicated repost courtesy of The Baseline Scenario. To view original, click here. Reposted with permission. The Economic Policy Institute put out a series of charts detailing inequality in retirement savings across several different demographic characteristics. The most obvious picture is that the shift to 401(k) plans has produced vast increases in retirement…