With fewer employers offering defined benefit (i.e., pension) retirement plans, 401(k) plans have become the standard retirement vehicle in recent years. But is there room for improvement? Roger Ferguson seems to think so, according to an article in “USA Today”. Ferguson is the CEO of TIAA-CREF, which specializes in retirement services to those in the educational and nonprofit fields.

He believes there are several ways that existing 401(k) plans could be better utilized, including:

• Increased enrollment through plan features such as automatic enrollment and automatic escalation of contributions
• Greater diversification of investment options, ranging between 15 and 20
• Giving participants access to objective investment advice
• Greater use and simplification of financial vehicles, like annuities, that offer participants secure, long-term income

Ferguson acknowledges the difficulties in this economy of participants contributing to their 401(k) plans at rates such as 10 or 14 percent. He believes, however, that participants need to stay in the habit of saving, contribute what they can for right now, and make higher rates of contribution an eventual goal.

NADART offers retirement plans with various features, such as automatic enrollment, and more than 20 diverse investment options. Online Investment Guidance will be available to plan participants in the coming months. To find out more about sponsoring a plan, please contact us at (800) 462-3278, ext. 7161 or by e-mail at nadart401k@nada.org.