August 21, 2006


Law makes significant changes to 401(k)s: Employers will soon see plans in a different light. So should you (PAMELA YIP, 8/21/06, The Dallas Morning News)

The 401(k) is transforming.

The pension reform bill that President Bush signed into law last week makes 401(k)s friendlier to workers and encourages employers to help savings-challenged Americans build their nest eggs for retirement.

"One of the lasting influences of the Pension Protection Act is to begin laying a foundation for a transformation of the 401(k) as we know it today," said Christopher Jones, chief investment officer at Financial Engines Inc., an investment advisory firm.

The most potent change is the provision that smoothes the way for employers to automatically enroll workers in 401(k) plans, bump up their contributions over the years, and put them in suitably aggressive investments to meet their retirement needs. [...]

The 401(k) was invented in the 1980s as a supplement to company pension plans. The new law – in its realization that corporate pension plans are distressed and dying, and its efforts to make 401(k)s more automatic and universal – in effect anoints the 401(k) as America's new primary retirement plan.

Ms Yip thinks the 401k evolved due to Darwinism, when, in fact, it was intelligently redesigned.

President Bush and Social Policy: The Strange Case of the Medicare Prescription Drug Benefit (Political Science Quarterly, Summer 2006)

DOUGLAS JAENICKE and ALEX WADDAN analyze the distinctive partisan politics that culminated in the passage of the 2003 Medicare Prescription Drug, Improvement and Modernization Act, which not only created a new prescription drug benefit for the elderly but also advanced a Republican agenda for re-structuring Medicare and health care more generally. They argue that while electoral expediency drove most Republicans to support drug coverage for the elderly, their stealth-like conservative reforms of Medicare caused most Democrats to oppose the details of the Republicans’ legislation.

Posted by Orrin Judd at August 21, 2006 5:07 PM
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