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Critics pan life cycle proposal; Say plan sponsors shouldn't have to hire investment managers.(News)
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Investment News
- Article date:
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November 13, 2006
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Copyright informationCOPYRIGHT 2006 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Kathie O'Donnell
BOSTON - Critics of a proposal that would require 401(k) plan sponsors to hire an investment manager if they wanted to enroll workers automatically in their own life cycle portfolios without liability say that it will drive up plan costs and benefit large mutual fund firms.
The Pension Protection Act of 2006 amends the Employee Retirement Income Security Act of 1974, directing the secretary of Labor to issue regulation identifying qualified default investments. Plan fiduciaries enrolling workers who don't give investment preferences would be protected from liability if they picked one of those options.
Three types of investments would ...