Common sense approach offered as a way to deal with compliance of 404(c)

Article Abstract:

Section 404(c) of the Employee Retirement Act of 1974 is a legislation which shifts the responsibility for investments from the plan sponsor to the participant. This law also reduces the liability of trustees for the investments. Several steps which will help plan sponsors in complying with the legislation and allow them to create investment choices for employees are presented. Giving employees the chance to select from a variety of investment choices will ensure that the plan chosen is the one most appropriate for them. However, both participants and plan sponsors should be actively involved in the process to guarantee the success of the investment plan.

Regulatory compliance costs, Legislation

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The public portfolio: are the management demands really different?

Article Abstract:

The traditional beliefs regarding the management of investment programs sponsored by for-profit and not-for-profit investment organizations are discussed. Achieving high portfolio returns at tolerable risk levels is the main objective of each organization, whether for-profit or not-for-profit ones. Decisions based on economic factors, employees' turnover and interests in corporate governance issues depend on the individual's perspective, not because they work in a profit or nonprofit firm.

Portfolio management

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Viewing the real risk of fixed income investing

Article Abstract:

Majority of 401(k) assets are invested in guaranteed investment contracts and other fixed income instruments probably because of the delusion that they do not depreciate in value. Fiduciaries may not be considering risk factors such as the opportunity cost of securities. Data for 1941 to 1992 rolling 10-year annualized period indicate the inefficiency of a 100% fixed income portfolio, resulting to minimization of returns but not the risks.

Securities, Fixed income securities, Guaranteed investment contracts

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