Congress Eyes 401(k) Changes

With the stock market nose-dive shrinking Americans' 401(k) retirement accounts, Congress plans to evaluate what changes can be made to the system, according to a report from Reuters.

Rep. George Miller, chairman of the Committee on Education and Labor, told Reuters that planned hearings will likely lead to, at minimum, a revival of reforms that were initially proposed last spring before the global financial crisis took hold. These changes include providing workers with more independent advice on how to invest the assets in their accounts, and make 401(k) fees more transparent.

Quoting a study from the non-profit, non-partisan Employee Benefit Research Institute in Washington, Reuters noted that balances in U.S. 401(k) accounts are down $573 billion since one year ago.

"The drumbeat for (the changes) is now growing, because not only did the price of stock go down, but in many cases people found out this (system) has been manipulated one way or another," Miller told Reuters.

Miller added that he was unsure whether it had been a mistake to let employers gradually shift to the 401(k) system in recent decades that has left an increasing number of workers without the fixed benefit for life that pensions pay.