401(k) Automatic Contributions
The Feds want to make 401(k) contributions mandatory:
The Labor Department says the proposed regulation should give employers who automatically enroll workers in a 401(k) plan some protection from lawsuits if the investment options chosen are “reasonable.” Some companies are reluctant to use automatic enrollment for fear that employees whose investments lost money would sue.
Don’t we already have a compulsory retirement system?
Update: Yeah, the slavery bit in the title was bit much. Uncle sort of pulls a Godwin. Consider it rescinded. However, I think this could be a precursor to requirements for mandating retirement.
August 23rd, 2005 at 10:06 am
I was under the impression that it would make enrollment the default, and you could change it if you wanted. For example, it would make the 401 the default when you frist start work. I like making it the default, (and as long as it is explained well to employees) because it makes people work to not save money. I do not think that this is forcing you to save money. You can still take the money, that is just not the default setting if you will.
Several companies are also removing the one year wait, I know mine did.
August 23rd, 2005 at 10:08 am
Investment should be a conscious decision not some automated afterthought.
August 23rd, 2005 at 11:56 am
I sense a certain disconnect between the heading and your quote from the story. One says the feds want to make 401(k) contributions mandatory, the other says they want to allow employers to do so. The former smacks of slavery, the latter, of capitalism. Which is it?
August 23rd, 2005 at 12:00 pm
In hindsight, the slavery bit was a bit much but, geez, do you realize how many titles I have to come up with a week?
August 23rd, 2005 at 5:12 pm
It’s not making contributions mandatory. It’s just making it a default on system (where you make contributions unless you go to HR and request not to) instead of a default off (you only make contributions if you go to HR and request it). It’s still unecessarily paternalistic, but it’s not mandatory.
August 23rd, 2005 at 7:51 pm
“Investment should be a conscious decision not some automated afterthought. ”
Agreed, but technically in this case they are making it an automated forethought> 🙂