Welcome to the latest edition of This Week in Pensions! After taking a week off, we are back with the latest news in the fight for a secure retirement. As we always do, we have gathered the top stories about pensions and retirement security from the previous week.
Here are this week’s top stories:
- It’s time for our retirement security to declare independence from 401(k)s by Bailey Childers: writing in the Huffington Post, NPPC’s executive director reflects on the impact “Brexit” will have on financial markets and retirement accounts in the U.S. She notes that the reliance on 401(k)s weakens retirement security for working families by exposing them to increased market risk, like the “Brexit.”
- Let’s make retirement great again – by bringing back a pension system by Suzanne McGee: the Guardian’s U.S. personal finance writer perfectly lays out the case against 401(k)s:
“For the most part, the 401k has been a cash-generating machine for investment firms and a source of extra stress for employees. The latter have to find a way to fund them from their paychecks – when incomes have stagnated – and max out what an employer will match. Then they have to puzzle their way through the investment options, wrestling with what often feel like complex questions regarding asset allocation, risk tolerance and the best investment products. If they want professional advice, they have to pay for it.”
- Women get shortchanged when saving for retirement by Robert Powell: women face challenges in saving for retirement that men do not face, according to a recent report from the National Institute on Retirement Security. What can women do to prepare for retirement:
- Save at work
- Save in an IRA
- Get rewarded for saving
- Do not kick the can down the road
- Hedge Funds Provide Worst Long-Term Gains to U.S. Pension Plans by John Gittelsohn: a recent study found that hedge funds were the lowest-performing asset class for public pension plans over the 17 year period studied. Hedge funds only generated an average return of around 5 percent, despite the lavish fees often paid to hedge fund managers.
- Four proposals for improving retirement security by Rob Kozlowski: finally, Pensions & Investments magazine recently compared four different plans for improving retirement security for American working families. While none of these plans offers the security and reliability of a defined benefit pension, they each offer interesting ideas on how to tackle the retirement crisis.
Be sure to check back next week for the latest news in the fight for a secure retirement!