401(k)s a Losing Battle?

According to a recent study, old-style defined-benefit pensionsare outperforming 401(k)s by the widest margin since 1995.  However, many private employers refuse tooffer them, instead going with more expensive and lesser performingactively-managed funds. 

Actively-managed funds can reduce up to 20% of a saver’s returnsby the time he retires due to the expenses that middlemen eat up.  After accounting for fees, actively managedfunds produce significantly less returns than safer index funds.  Employees that find they’re overchargedshould do something about it now instead of waiting 30 years or more tocomplain.

See John Wasik, 401(k) Folly Continues, Forbes, May 29,2013.