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charlesarthur : pension   1

Why Plan Sponsors need Professional (Independent) Advice? - The Big Picture
<p>I went on to share the recent story <a href="http://www.bna.com/intel-401k-participants-n57982062983/">from Bloomberg BNA News</a> (October 30, 2015) on class action lawsuit directed at the Intel 401k Investment Committee – specifically addressing changes made by that IC which were so poorly conceived, expensive, and probably inappropriate per regulatory standards as to give the members of that Investment Committee a lot of sleepless nights. And it should…the story is a cautionary tale.

In a span of less than four years the Intel Investment Committee took the plans investment options and changed them by a magnitude of 10 fold, taking $50m of “Alternative Investments” and raising that amount almost $700m in just a few years. Worse, they (the investment committee) ‘directed’ that these expensive and not exactly appropriate ‘securities’ be added to the seemingly vanilla Target Date Funds that they themselves designed.

Did Intel plan participants truly – rank & file workers – understand what was under the hood of those Target Date Funds? As the complaint states, the Investment Committee “invested a significant portion of the plans’ assets in risky and high-cost hedge funds and private-equity investments.”</p>


For non-American readers, 401Ks are basically retirement/pension funds. If Intel, which has just laid a ton of people off, is shifting those into risky assets, you have to ask how assured the payouts to thousands of people recently laid off is going to be.
intel  pension 
june 2016 by charlesarthur

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