Investors Who Stuck with 401(k) Plans Now Benefiting, Mutual Fund Experts Say
January 11, 2010 | By Tejinder Singh | firstname.lastname@example.org
The market downturn of late 2007 brought the balances in 401(k) and other defined contribution accounts down by “almost one-quarter in 2008,” the president of Investment Company Institute said at a Newsmaker Jan. 8.
Paul Stevens said it has "caused some in the press and policy communities to question the value of 401 (k) and other defined contribution plans.”
During that time, American workers still supported their 401(k) plans and stayed the course—and those who did so are now being rewarded, according to ICI survey data.
He and two other mutual fund industry leaders discussed how 401(k) participants are behaving and faring one year after the market calamity of 2008 and outlined ways to improve the nation's retirement system
Vanguard Group Chairman Jack Brennan said "savers are sticking with 401 (k).” He pointed that “target date funds” did “better than non-target date funds.”
Brennan said he does not agree that retirement plans have collapsed.
Ariel Investments President Mellody Hobson said there is an urgent need for “financial literacy” as it is “lacking in our education system.”