In case you missed it, September 4 was "National 401(k) Day," sponsored by the Profit Sharing/401(k) Council of America to celebrate the anniversary of the 1978 legislation that ushered in the do-it-yourself approach to retirement riches. The event took place three weeks to the day following the abrupt resignation of Enron CEO Jeffrey Skilling.
No one remarked on the convergence, yet now, several months later, the Enron debacle may well produce the most substantive changes to 401(k) legislation since its creation. Lawmakers have rushed in with any number of proposals, prompting North Dakota congressman and pension expert Earl Pomeroy to note, "The good news is, Congress is now interested. The bad news is, Congress is now interested."
Whether Pomeroy's fear that "ill-advised, well-intentioned legislation [may] do some serious damage" comes to pass remains to be seen, but in the interim, companies are taking a hard look at their 401(k) offerings.
So are we. This year we've made three substantive changes to our annual 401(k) Buyer's Guide. First, in collaboration with Dalbar Inc., a leading research firm specializing in 401(k) plans, we've defined new standards for inclusion: all companies now meet clearly delineated standards in terms of how long they've been in business, the presence they have in various market segments, and the degree to which current clients use various services.
These details are spelled out on our Web site, which brings us to the second change: because we are offering far more data on more companies, deep profiles of each provider are available at www.cfo.com/401kguide.
And finally, this year we've segmented the profiles in a way that best reflects how companies actually shop for 401(k) providers, either by full-service firms or by "à la carte" providers. This issue profiles nearly six dozen major players in the full-service space, and next month we'll bring you listings of the companies that offer record-keeping and investment-only functions à la carte.