401(k) changes seen 'significant'; Default options likely to affect investments in funds, EBRI chief says.(News)

Investment News, April, 2007

Byline: Sara Hansard WASHINGTON - New default options that the Department of Labor will likely approve for 401(k) investments will have a "significant'' impact on the way mutual fund assets are invested, independent fund directors were told at a conference here April 12. Under the Labor Department's draft rule issued this year implementing the Pension Protection Act of 2006, companies will likely have to invest 401(k) assets in diversified-portfolio funds when employees fail to select their own investments.

When employees have failed to do so, companies have traditionally invested most of the money in stable-value products or money market funds, according to Dallas Salisbury, president and chief executive of the Employee Benefit Research...

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