Investment News, March 15, 2009
“There needs to be some emphasis placed on finding a structure that will make this economically viable because there are opportunities here for providers to grow their businesses substantially,” said Beth Almeida, executive di-rector of the Washington-based National Institute on Retirement Security.
The administration may want to consider combining various employers’ auto IRAs into larger pools of assets — much like the concept behind multiemployer defined benefit plans, she suggested.
With these plans, which are most typically utilized by union workers, a number of smaller companies contribute to the one single fund that’s managed by an outside board of trustees.
By pooling the auto-IRA assets, mutual fund companies, financial advisers, record keepers and administrators could take advantage of the “tremendous economies of scale that 75 million people could provide,” Ms. Almeida said.
Read the full article here.