Big Challenges With Small IRAs

EBRI [Employee Benefit Research Institute]

In 2005, the Department of Labor (DOL) issued regulations with respect to automatic force-outs of employment-based retirement plans with values of $1,000 up to $5,000 to IRAs. DOL states a fiduciary is deemed to have satisfied his or her fiduciary duties under section 404(a) of ERISA so long as the designated IRA provider of the automatic IRA, among other things, limits the initial investment choice of the IRA to products designed to preserve principal and provide a reasonable rate of return.

The result: a significant percentage of small IRAs are found to be invested 100 percent in money in Rollover IRAs, even though many had 100 percent allocations to balanced or target-date funds in their 401(k) plan. Diversified asset allocation funds are, of course, the safe harbor default for automatic enrollment arrangements in defined contribution plans.

Join EBRI for this webinar, where we will quantify how many of these accounts exist in the rollover market, describe the asset allocation in them over time, and the length of time these accounts are held. In addition, we will address potential improvements for these types of accounts.

Speakers:

• Spencer Williams, President/CEO, Retirement Clearinghouse
• Courtney Eccles, Director, Secure Choice Savings Program, Illinois State Treasurer’s Office
• Craig Copeland, Senior Research Associate, Employee Benefit Research Institute

View webinar slides.

More Information, How to Register