The White House on Monday previewed several middle-class tax cuts and spending programs that President Obama will propose in Wednesday’s State of the Union address.
Proposals include:
- Improve 401(k) plans [2] by requiring better fee disclosure, encouraging employers to make unbiased investment advice available to workers, promoting annuities [3] and other forms of guaranteed lifetime income and requiring better disclosure of target-date funds.
Better fee disclosure “is something that is coming. The Obama administration is trying to push it along a little faster,” says Jon Chambers, a retirement plan adviser with Schultz Collins Lawson Chambers. Providing investment advice “is a battle that has been going on for over a decade and (appears to be) at a stalemate.”
Chambers believes the Securities and Exchange Commission will require better disclosure of target-date funds.
Encouraging annuities reflects the fact that 401(k) plans are replacing traditional pension plans as a primary retirement vehicle, he adds. The question is, “how do you turn a 401(k) plan [4], which is really a savings accumulation vehicle, into a retirement income vehicle?”