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Good article in Thursday's Wall Strret Journal on how companies screw their employees out of their pensions. An excerpt:


"Some of the changes are so complicated that even government pension experts aren't sure how they work. Created by consulting firms and companies' finance departments, the maneuvers flourish with little oversight. They go well beyond the "cash balance" system that caused an outcry last year after The Wall Street Journal reported that the new-style plan could cut older workers' pensions as much as 50%.

Some companies make subtle changes to the benefit-calculation formulas of traditional pension plans. Others take advantage of pension-law loopholes to eliminate early-retirement subsidies, and still others adjust compensation formulas to lower the amounts that count toward a pension. Says Brooks Hamilton, a lawyer who runs a pension consulting firm in Dallas: "Never have so few plundered so much from so many."


Full article at:

link can only be accessed by subscribers to WSJ Interactive Edition.

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Mass Mutual offers both its own "separate Account" funds and some repackaged mutual funds that it buys for you on the open market. The latter can be watched in the regular press (with some caveats - see later), the former can be reviewed through the company's published performance reports. I imagine the latter are also available on-line.

You are entitled, by ERISA law, to annual statements, and to a copy of the Plan and all amendments. Furthermore, since the Plan gives you investment choices, the Company probably intends to comply with the Dpt of Labor rules under ERISA 404(c) giving you enough choices and enough information to make informed choices. If the Company complies with all of the DOL rules, then it has partially absolved itself of the responsibility for the investment results from the choices you make (and hence the investment return you get). Ask you employer in writing whethre they are complying with '404(c)' - they aren't if they haven't specifically told you so - in writing.

When Mass Mutual buys retail mutual funds for your account, they incur expenses of administration and marketting etc. Therefore, the actual investment results that your 401(k) account receives is necessarily reduced. This isn't necessarily a bad thing, because this 'repackaging' process of mutual funds by an insurance company is very good way to give a relatively small 401(k) Plan access to a variety of popular mutual funds from different families of funds that would be impossible otherwise.

You should also have access to your account through an '800' telephone number. Through that you can get timely info on your net investment returns.
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