Abstract
This article provides an overview of 401(k) plan features, requirements and stipulations. Based on the premise that weak investment performance may be more a result of poor fund diversification than a by-product of economic fluctuations, the article also explores how two companies—a small, private high-tech start-up developing an new plan and a public company revamping a existing plan—approached designing smart, diversified 401(k) plans from very different perspectives and needs. In addition to providing details on recent 401(k) rules and procedures, the article discusses how each company built smart 401(k) plans based on diversified and informed investment selection, and educated and communicated with employees about these 401(k) developments. The article demonstrates how true investment diversification can be achieved by both plan administrators and employees.
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