If plan sponsors wish to turn their 401(k) plan into a more pension fund like plan they need to promote professionally managed portfolios. Because of provisions in the Pension Protection Act of 2006 plan sponsors can automatically place a participant in an age appropriate portfolio. The particiapnt can stay in the portfolio or change risk levels or opt out and pick their own fund mix. This, is the right way to manage a plan.

Some question the benefits of 401(k) plans because they transfer investment decision-making to generally inexperienced participants,” said Jean Young, chief author of the “How America Saves” report, in a statement. “Now, however, an increasing number of participants can leave the asset allocation, investment selection and ongoing management responsibilities of their account to the professionally managed allocation options available in their defined contribution plans. 

This trend will continue for all those investors unable to predict the future.

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