In a 5/6/09 WSJ “Fund Track” article, Jennifer Levitz reviewed proposed changes to 401K retirement plans, which are the primary savings for 60% of workers.

One proposal is a listing of 401K fees on investors’ statements. A second proposal is a more automatic access to retirement plan participation. Obama’s budget “calls for the future establishment of a program in which all workers would be automatically enrolled in employers’ retirement plans.” There would also be a mandate for those employers without retirement plans to “enroll their employees in a direct-deposit individual retirement account.” Employees will have the choice to opt out of these plans.

Some industry proposals would limit equity investments in target-date funds. These funds are supposed to change their investment mix to be more conservative as the current date approaches the target date, when an investor presumably needs income from the fund. These funds are used for retirement and for college savings. This bear market revealed that some funds with target dates of 2010 had 60% of the fund in stocks, an inappropriately aggessive mix that prompted large declines in value as the stock market sank.

Other industry proposals are greater tax incentives for workers and employers who participate in 401K plans, and the creation of government insured annuities that would provide a dependable source of income for retired workers.