Do employers or the government guarantee 401(k) accounts?
Employers never guarantee 401(k) accounts. They are considered “fiduciaries” of 401(k) plans, which means they are legally responsible for supervising the plan and the money you invest. This supervisory relationship obligates the employer “to protect your financial interests by choosing and monitoring reputable and competent administrators and investment managers. Employers must give plan participants at least three distinctly different investment choices, each having a different level of risk. You must also be given the opportunity to move your money among these investments at least quarterly, and sufficient information to make sensible, informed investment decisions. But your employer doesn’t offer you protection against any investment losses you may suffer. Although most traditional pension plans are insured by the federal government, there is no such guarantee for 401(k) accounts. The federal Pension Benefit Guaranty Corp. insures traditional pension plans because the government wa
