401ks: America's Biggest Investment Fraud was Preventable

The failure of 401ks was foreseeable decades ago and well-known to both employers and investment industry insiders.

For example, a 2008 Annual Survey of 401k Plan Sponsors by Deloitte Consulting (conducted before the market meltdown) found that 80% of employers believed that 401ks were effective in recruiting employees but only 13% believed that the 401k plans they offered would provide retirement security for their workers.

Two profound features of the 2008 market meltdown, both of which continue to plague the nation, were the housing bubble and the failure of 401ks. Remarkably, unlike the housing bubble which has been discussed exhaustedly, the dismal failure of 401ks as a retirement vehicle has received little attention. No meaningful regulatory reforms have been enacted. There have been no investigative panels or committees convened and no one has been held accountable. Nothing has changed—except that now it is clear that many older Americans will sink into poverty once they are unable to work.

We are on the precipice of the greatest retirement crisis in the history of the world. In the decade to come, we will witness millions of elderly Americans slipping into poverty. Too frail to work, too poor to retire will become the “new normal” for elderly Americans.

The above article was taken from a Forbes.com blog site.