Improving 401(k) Asset Choices: Avoiding the Next Enron
Thursday, June 10, 2004
8:45 a.m. - 12:30 p.m.
The Brookings Institution
Falk Auditorium
1775 Massachusetts Avenue, NW
Washington, DC
How can we prevent the next Enron and improve investment choices throughout the 401(k) system without curtailing individual choice?
In building a retirement nest egg, there is one investment principle on which all of the experts agree: diversification. But many (401)k participants do not act on this advice. Most participants have either very aggressive portfolios (over 80 percent equity) or very conservative portfolios (no equity). And nearly half of participants with access to their own company's stock hold more than 20 percent of their 401(k) assets in this form. In response to the lack of diversification, researchers, policy experts, and financial services companies have developed potential solutions. Typically, these approaches would diversify an individual's portfolio automatically over time. The "auto-pilot" approach offers the potential to significantly improve asset diversification for many 401(k) participants, while still allowing them the freedom to make different choices if they prefer.
Leading academic and legal experts -- including Richard Thaler, Alicia Munnell, and Mark Iwry -- joined industry representatives and others at the Brookings Institution on the morning of Thursday, June 10 to examine these issues.
Moderator:
WILLIAM GALE
The Brookings Institution
Speakers:
ANN COMBS
Department of Labor (invited)
BENJAMIN CARDIN
Congressman (D-Md)
Panelists:
ALICIA H. MUNNELL
Boston College
RICHARD THALER
University of Chicago
DAVID WRAY
Profit Sharing/401(k) Council of America Co-Director
MARK IWRY
Brookings Institution
MICHAEL HENKEL
Ibbotson Associates
JOHN KIMPEL
Fidelity Investments
