Once the stimulus plan is completed, Congress really needs to look into the retirement plans so that America is set for the future. When the stock market was going up, fewer people took issue with the high charges from Wall Street but now that the losses have mounted, every cent is under review. The HuffingtonPost has an article about a new service from BrightScope that lets you see just how good (or bad) your 401K plan is.
Until now, an objective evaluation of 401(k) plans has been extremely difficult because of the complexity of these plans and the cleverly hidden costs which would take a pension actuary to uncover. These excessive fees have dramatically reduced employees account balances. By some accounts, the combination of poor investment options, high expenses and poor planning have caused many plan participants to have a zero return on their 401(k) investments.
A recently launched web site, Brightscope, may change everything.
Brightscope crunched 401(k) plan data from public resources and compiled an extensive database of information. Using over 200 data points, including plan costs, amount of matching contribution and quality of investment options, it assigned a numerical rating to each plan. It then compared the rating to the lowest, average and highest rating in the peer group. It also calculated how many additional years an employee in a given plan would have to work, and how much was lost in retirement savings, compared to the highest rated company in that peer group.
