Like most of the country, our thoughts are with the people of Ukraine, and the crisis that continues to unfold. Concern over the severity of the situation is manifesting itself in several ways here at home, one of which is a massive increase in 401k trading activity from usually steady plan participants. According to Alight Solutions, on just one day last week, trading in defined contribution plans was 7.5 times its average volume. We’ll keep you posted as events unfold.
Managing editor Brian Anderson reports that one of the largest 401k plans in the country is under federal investigation. According to the bank, the Department of Labor and “other federal agencies” are looking into Wells Fargo’s 401k plan.
A disclosure from Wells Fargo states:
“Federal government agencies, including the United States Department of Labor, are reviewing certain transactions associated with the Employee Stock Ownership Plan feature of the Company’s 401(k) plan, including the manner in which the 401(k) plan purchased certain securities used in connection with the Company’s contributions.”
Lastly, new research from Voya, Shlomo Benartzi, and our own 2017 TAPO George Fraser, among others, finds a simple word change resonates significantly with workers and their savings rates. Simply changing the framing from a percentage of income to pennies on the dollar increases their understanding and deferral rates. And it’s not retirement savings—it also works for emergency funds and other needed areas.
It’s all happening this week.