Gone forever are the days when you could retire with a fat pension generously provided by the employer you loyally spent most of your working life with.

Those pension plans that remain are usually found in union-dominated industries and, in some prominent cases, are bankrupting the companies that provide them. In the public sector, school district and police department retirement plans are deficit-funded with increased taxes so retirees can continue to enjoy generous inflation-protection benefits. But as a result, taxpayers are being overburdened and, understandably, are starting to revolt.

The seeds of change began in the late '80s, when  companies began abandoning their pension plans and adopting the participant-driven 401(k) plan instead. Today, it has become the de facto pension plan and is found at virtually every company in the United States.

But all is not well with the pension/retirement system and the winds of change are blowing again over the retirement landscape. The volatile markets of 2008 exposed major flaws in the 401(k) plan, like the inability of plan participants to choose an appropriate asset allocation, or even to successfully negotiate market cycles without taking big losses. The investment losses also exposed the high costs heaped upon participants by insurance companies and mutual fund plan sponsors.

In response to the rising chorus of protests, Congress took up the mantle and proposed new legislation designed to improve the prospects for an individual investor's success. There is a lot at stake here. Millions of Americans will need to retire in the next 20 years and many will not have enough savings; their shortfall will stretch the government's resources to the limit, expanding our deficits and wounding our credit.

In the past, pension plans were run by professional money managers held accountable for their investment decisions. As such, they tended to be cautious and prudent custodians of your money. Your 401(k), however, has no such captain to steer the ship. Plan participants are forced to act on their own behalf as investment professionals, but without the investment experience or expertise necessary to do so successfully.

People ask whether employers should be responsible in lieu of professional managers. But plan trustees avoid recommending specific investments or strategies to their employees for fear of being sued and limit their advice mainly to generic asset allocation strategies, offering no actual professional management.

Here lies the dilemma: How do we bring better investment success to the 401(k)?

Congress has recognized the problem and debated whether to fix the 401(k) or scrap it altogether in favor of some alternative.

We will have a major problem if we fail. If the plan balances of baby boomers are inadequate to help them meet their income needs after they finish working, the government will have to step in and help broke seniors. Social Security, Medicaid/Medicare and welfare will be the fallback, even though these plans are already in serious trouble. The nation simply cannot afford to ignore the problem. That's why the 401(k) will be the continued focus as the government seeks ways to improve and insure the system against default. And that means more government intervention and regulation.

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