{"id":187001,"date":"2013-07-25T19:51:00","date_gmt":"2013-07-26T00:51:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2013\/07\/25\/schadenfreude-on-401k-plans\/"},"modified":"2013-07-25T19:51:00","modified_gmt":"2013-07-26T00:51:00","slug":"schadenfreude-on-401k-plans","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2013\/07\/25\/schadenfreude-on-401k-plans\/","title":{"rendered":"Schadenfreude on 401(k) Plans"},"content":{"rendered":"<p>Ian Ayres, a professor at Yale, has been reviewing 401(k) programs, and will <a href=\"http:\/\/online.wsj.com\/article\/SB10001424127887323971204578626103409341648.html?google_editors_picks=true\">publicize the really sucky plans that charge excessive fees<\/a>:<\/p>\n<blockquote><p><span style=\"color: blue;\">A Yale Law School professor is causing a ruckus among U.S. corporations with plans to publicize a study of employers&#8217; 401(k) plan costs.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">The professor, Ian Ayres, has sent about 6,000 letters to companies, saying he would disseminate the results of his study using Twitter, with separate hashtags for each company.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">Prof. Ayres has mailed out several different versions of the letter since June, and at least one said that he had identified an employer&#8217;s 401(k) specifically &#8220;as a potential high-cost plan.&#8221; He said that he and his research partner planned to publicize the results in spring 2014.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">Tri-City Electrical Contractors Inc., in Altamonte Springs, Fla., received one such letter on July 5. It said that the company&#8217;s plan ranked worse than 77% of plans of comparable size based on total plan cost.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">&#8220;As a reminder, fiduciary duties are the most stringent imposed by the law, and require administrators to act solely in the interests of plan participants,&#8221; continued the letter, which was reviewed by The Wall Street Journal.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">The letters come as administrators of 401(k) plans have been under fire for what some workers and retirees say are excessive fees. Federal fee-disclosure rules went into effect last year requiring 401(k) administrators to better spell out the fees being charged to plan sponsors and participants.<\/span><\/p><\/blockquote>\n<p>The problem is that there are a lot of 401(k) administrators who over-promise returns to justify inflated fees.<\/p>\n<p>Call me old fashioned, but I think that there should be (low) statutory limits on 401(k) and IRA because otherwise, the tax breaks are simply going straight into Wall Street&#8217;s pockets (expense ratio is largely unrelated to plan returns).<\/p>\n<p>If you want to blow your money on a mutual fund manager who charges high fees, it&#8217;s your business, until Uncle Sam starts supplying tax benefits, at which point, it becomes a matter for the public to discuss.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ian Ayres, a professor at Yale, has been reviewing 401(k) programs, and will publicize the really sucky plans that charge excessive fees: A Yale Law School professor is causing a ruckus among U.S. corporations with plans to publicize a study of employers&#8217; 401(k) plan costs. The professor, Ian Ayres, has sent about 6,000 letters to &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[991,1005,970,1004,992],"tags":[],"class_list":["post-187001","post","type-post","status-publish","format-standard","hentry","category-academe","category-business","category-corruption","category-finance","category-statistics"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/187001"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=187001"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/187001\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=187001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=187001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=187001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}