House may help curb the 401K blues
Congress is meeting to explore ways to help workers cope with shrinking 401K's. One method would encourage penalty-free 401K and IRA loans. Nancy Marshall Genzer looks into what else the House is considering.
401k nest egg (IStockphoto)
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TEXT OF STORY
Bill Radke: And what about your retirement account? Well, it's not being nationalized, but you've probably been watching it shrink lately. A House committee holds a hearing today on ways to help workers cope with dwindling 401Ks. Marketplace's Nancy Marshall Genzer reports.
Nancy Marshall Genzer: So, you've got the 401K blues? The American Benefits Council says it can help. This trade group, representing Fortune 500s, wants new rules allowing workers to take out a loan from their IRAs and 401Ks penalty-free.
The Council's president, James Klein, also says he would like the Labor Department to distribute model language businesses could use as general investment advice. Right now, companies don't dispense advice because they're afraid of being sued.
James Klein: That would create no liability on the part of the employer, but would help them give their workers some assurance about the proper course of action to take.
University of Pittsburgh business school professor James Craft says short of advice, businesses can at least hold your hand to keep you from jumping off a cliff when you check your balance.
James Craft: Meet with your employees and let them know you understand what's going on, and we'll keep you informed of anything that comes up that affects the 401K.
Craft says, other than that, in the 401K world, you're on your own.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
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