Teresa Ghilarducci doesn’t like 401(k)s.
The professor of economic policy analysis at the New School for Social Research has a proposal to do away with them completely. Her idea, mandatory Guaranteed Retirement Accounts, is sending shivers through the 401(k) industry—advisors no exception.
“It’s like we’re picking up a toddler [the 401(k], and helping this immature, underdeveloped child over the puddle and to the curb,” she recently told 401(k) Specialist magazine.
She added that there’s “no indication that the 401(k) will ever include everyone, reduce fees to where they are appropriate, match long-term investing with long-term needs or provide fully for lifetime income. We need something that’s mandatory, with no leakage, and that’s what this is.”
Ghilarducci is joined by high-profile Democrat politician Elizabeth Warren in her criticism, the latter of whom recently asked the SEC to investigate certain 401(k) and financial services companies in the run-up the DOL fiduciary rule’s introduction to determine whether statements they made to clients about the rule “were contradictory and ran afoul of securities laws.”
Critics Ghilarducci and Warren are joined by such noted names as Vanguard founder John Bogle, entrepreneur Tony Robbins and “father of the 401(k)” Ted Benna, as well as industry supporters Brian Graff, Don Trone, Skip Schweiss and many more in speaking exclusively to 401(k) Specialist. Qualified 401(k) advisors can subscribe here. Views expressed by the all-star lineup range from pleased to problematic, optimistic to apprehensive.
“The 401(k) savings vehicle is the best and most viable vehicle to achieve widespread retirement security,” Ed Murphy, president of Empower Retirement , said in response to the criticism, most recently from U.K. comedian John Oliver, host of HBO’s ““Last Week Tonight.”
Full coverage of 401(k) critics and defenders, as well as fiduciary issues, rollover tactics, practice management strategies, client acquisition ideas and investment products that are critical to participant are all found in 401(k) Specialist.
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