NationStates Jolt Archive

http://news.yahoo.com/s/usatoday/20050822/bs_usatoday/rulewouldencourageautomatic401kenrollment

"The Department of Labor expects to propose a regulation by year's end that will encourage companies to automatically enroll their workers in 401(k) plans"

For those outside of the US or too young, 401ks are retirement savings accounts which are sponsored by employers in the US. An employee can put a portion of their earnings (up to 15%) without paying taxes on it. They can invest it in a variety of choices from stable low-interest investments to more volitile agressive ones and several in between. Many companies will contribute to the employes accounts with contribution matching the employees savings - often with company stock.

So now, instead of an 'opt-in' it is proposed to be an 'opt-out' program. What do you think?

I am opposed to the idea of "opting out" of things as opposed to "opting in" in most cases, so this is a bad idea.

I think that the government should allow for it, but not require it. Either way, the employee should be fully informed of what's happening and be given every opportunity to control the destiny of her 401k.

I am opposed to the idea of "opting out" of things as opposed to "opting in" in most cases, so this is a bad idea.


So then you also would support social security privatiation, since it gives an option other than the no opt at all which everyone currently has?

That's the problem. You have to "trust" the business leadership will be ethical.

When I worked for the goverment; they had me sign so much crap so quickly that I could have sold my sole and didn't know it......well I kind of did ;)

Point is: A new young employee could get a paper talking about opt out, told you can read it later and find the companies "opt-in" philosopy is to invest the majority of money into their stock.......

you didn't really read the article, did you. :rolleyes:

I work for a fortune 100 company and they have always required (since my working there anyhow) employees to be enrolled in the 401K plan since day 1, the employees can simply opt out of it if they want to, although most want to stay enrolled. The company only matches up to like 6%, so most keep theirs at that % if not lower... It seems to work just fine, as long as they do give you the option to opt out of it if you so desire.

It's fine for me. I love the idea of 401(k)s, anyhow. But as a matter of principle, I must oppose it.

401ks are great but i dont think the government needs to mandate anything about them. people have their own priorities and their own feelings about investments. it should always been an opt-in system.

401ks are great but i dont think the government needs to mandate anything about them...snip

Ummm, you do know where they got the name '401k', right?

Do you feel the same about social security mandates?

Ummm, you do know where they got the name '401k', right?

Do you feel the same about social security mandates?
as i understand it it was some smart-guy's interpretation of some subsection of some law somewhere that if interpreted a certain way would allow a business to offer investment programs to its employees that would be tax deferred.

social security isnt an investment program so no i dont feel the same about it.

as i understand it it was some smart-guy's interpretation of some subsection of some law somewhere that if interpreted a certain way would allow a business to offer investment programs to its employees that would be tax deferred.

social security isnt an investment program so no i dont feel the same about it.
http://www.ebri.org/pdf/publications/facts/0205fact.a.pdf
here is your history of 401k

401k plans are salary deferral first and foremost. Investment options always include a stable money market type account. Other investment options are avaliable for those who would prefer choices.

Social Security is similar in many ways to salary deferral. In fact the 'returns' are comparable to money market rates. The comparison between arrangements is quite valid: The primary difference is that the beneficiary of a social security contribution has no say in how their 'deferral' is invested - oh, and the social security administration has underfunded their promise (which is just as bad, if not worse, as a corporation who has an underfunded pension)

The best part about a 401k is that the money contributed by the owner belongs to the owner. The government cannot default on it. The same cannot be said of social security; Social security as it stands today is more risky.
Peculiar that you would be for a more risky endeavor...