Why is my company renaming my 401k plan to a Retirement Savings Plan?

Lauren

prob some way for them to mess you over i would watch it and question it..

Haley

I was actually going through the same scenario but they gave me an option of choosing the retirement savings plan or the 401k when I reach the age of 21 and the reasoning being is because in a 401k you can loose your money because your company has private investors that put your money up from your 401k into trading accounts to try and flip your money and you could either loose it or they could gain more for the company and with the savings you dont have to worry about loosing out which is much better i think personally

Marcus

A 401K is only legally allowed to make certain specific investments on behalf of the contributors. For example, a 401K manager is not allowed to invest in speculative instruments such as buy/sell options… but a plain old Retirement Plan administrator has more flexibility and can legally invest their contributors money in virtually anything.

A 401K administrator HAS to have certain credentials, maybe not a securities license issued by the NASD, but at least a minimum of some kind of legitimate investment education. A Retirement Plan administrator doesn’t necessarily have to provide extensive documentation as to his/her qualifications.

Your new plan may quite possibly allow much more risky investments than you are willing to accept. Read all their info very closely so you can make an informed decision. You may want to take your retirement money and roll it over into another plan where you have more control, or, if that’s not allowed, quit contributing to your company plan (though you may lose whatever they contribute on your behalf) and take the extra money in your paycheck (which has already been taxed) and invest it regularly in a mutual fund (or 2 or 3) which has risks that you feel are tolerable.

Armando

these other people are on drugs…I’ve seen 401k plans named retirement savings plans and even profit sharing plans. The name means absolutely NOTHING! Check out the plan document, or summary plan description, of the new plan and see if the provisions are the same. If so, then sleep comfortably. If not, then they will give you the opportunity to roll your money over into an IRA instead of into the other plan. Your choice if you want to do that. Generally when a merger occurs the companies also merge retirement plans. This is likely what happened in your case.

And btw no special training is needed for directing the investments of any type of plan. You simply need to invest prudently….I’ve seen small business owners invest for their participants and do quite well…and I’ve seen those knuckleheads with licenses do worse than they would have if they were simply in a 60/40 Equity/Bond split.