Feb. 24 (Bloomberg) — The Massachusetts Securities Division is calling on 401(k) plan administrators to report how many companies have shifted to a lump-sum matching contribution once a year, a change that can undermine worker savings.
The unit sent a letter to the 25 largest providers of 401(k) plans, requesting the number of employers who pay distributions at year-end, when the move was made from more frequent payroll periods and what workers are told about the potential consequences, the division said in a statement today.
"At a time when most Americans have much of their retirement savings in these 401(k) plans, it is crucial that they are made aware of the risks involved when a company shifts to a year-end distribution," William F. Galvin, Massachusetts secretary of the commonwealth and chief securities regulator, said in the statement.
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