(TNS) — Managing 401k accounts, even across multiple workplaces, could be as easy as ordering takeout food, if federal recommendations are allowed.
The Government Audit Office (GAO) has proposed creating a national 401k dashboard. This allows a user to manage all her 401k accounts in her one place, and also organizes plans for users with multiple accounts.
“Participants continued to face challenges in managing and tracking their accounts as they moved from one job to another,” the GAO report said. “However, federal action could alleviate these challenges.”
GAO said in its report that Congress should give federal agencies the authority to create dashboards, but it's unclear when the wheels will start moving.
And while it could be a one-stop solution for retirement planning, the former Carnegie Mellon University professor wonders if the dashboard will provide enough information to 401k plan participants to evaluate their performance. I'm not sure.
“Dashboards are great for cars and other items to make sure your system is working,” says the tool, which allows users to search and compare 60,000 401k plans by industry, region, and region. said Raul Valdez Perez, CEO and co-founder of Benchmine. Asset size.
stress and anxiety
Valdez-Perez said the federal government and 401k plan holders could benefit from tools that allow for comparison and navigation.
Such tools also answer questions such as: “Where can things improve?” What performance level can a 401k plan reasonably achieve?
“We are implementing new technology that allows us to easily assess comparative performance,” Valdez Perez said of the Squirrel Hill-based company.
Employer-sponsored 401k plans have become the most popular way for American workers to save for retirement. But every time an employee changes jobs, they may end up creating a new account if they don't combine their accounts along the way.
A GAO survey released in February found that two-thirds of 401,000 participants found a comprehensive pension dashboard, which allows them to see current and previous plan savings all in one place, a useful resource. I feel that.
According to GAO, more than 92 million Americans participate in 401k plans, saving more than $7 trillion.
Employees and former employees typically have little say in how a company-sponsored 401k plan operates, including in terms of fees, expenses, and the selection of vendors to provide services. However, in many plans, if a participant-directed brokerage account is an investment option, an employee can choose to invest in her 401k from a basket of investment options.
According to Benchmine, 2022 federal data shows that 405 of 828 401k plans with assets of $1 billion or more offer a participant-driven brokerage account option.
According to the GAO, transferring retirement benefits from one plan to another causes stress and anxiety for some participants.
“The 401,000 participants who recently completed rollovers between plans faced challenges in understanding and complying with plan requirements,” GAO said. Although the report did not specify which parts of the rollover process were most problematic for plan participants, a high percentage were dissatisfied.
“Beneficial for participants”
For example, 25% of participants said the process had too many steps to follow. Additionally, 22% said they were unclear about the questions and information on the rollover form.
“Enabling plans to automatically roll over after changing jobs is beneficial for participants, especially those who are no longer in the plan, as they can benefit from account consolidation without going through a difficult manual process. “There is a possibility that
The idea comes from a study by GAO of six countries that have implemented pension dashboards: Australia, Belgium, Denmark, the Netherlands, Norway, and Sweden. All six countries have established a central pensions dashboard that allows participants to view their retirement savings online, free and securely.
Benchmine provides more insight into your 401k plan, but accessing the information requires more steps than a simple dashboard.
The Benchmine search engine is a free online tool that gives the public access to data that all companies that offer 401ks to their employees are required to report annually to the U.S. Department of Labor. Users can see how their 401k balances and annual contributions compare to the average balance for employees at a particular company. Or you can compare it to the average balances of employees at other companies across the country.
The Benchmine search engine shows you exactly where a company's 401k stands when compared to other companies in a variety of ways, and also provides advice on how to improve.
Valdez-Perez said search engines can also be helpful for job seekers, since poor performance in a 401k plan can be a red flag.
“The 401k plan is just another aspect of running a company,” Valdez-Perez said. “Just like high employee turnover, poor 401k plan performance raises red flags.”
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