Quote:
For help in designing the plan, the government turned to the insurance industry, the main source of long-term investment products in Britain. By assigning this role to the industry that would benefit most, the government had in effect asked the fox to design the chicken coop.
The competition to sell pension investment products to the public was intense. Products were numerous and complicated, and few people could understand them. Fees and costs often were not fully disclosed by agents, who could pocket a portion of the first few years’ sales. Rules were poorly designed and rarely enforced.
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at a glance i would say that is an obvious setup for failure. i wouldn't support any plan that let the insurance industry be in charge of anything.
even here and now, getting your investment advice from your insurance agent is a surefire way to lose money. insurance products (annuities, life, etc.) pay the highest commissions with the lowest returns of any product i come across. (generally, although there are exceptions.)
to go a step further i wouldn't support a plan here that came to the private sector for me and my colleagues to invest the money. the government, or whatever organization is set up to run this can quite easily hire qualified money managers to run funds exclusively for this system. no commissions, no payouts to brokers, etc.
this organization can be self sustaining and even profitable if that is a goal with extremely low annual expenses, most likely between .10-.30% annually. it really wouldn't be that much different than the no load funds that are in existence. the funds would have to be extremely limited by their own prospectus so their actions would be very transparent.
so, yeah HM - i'd stand side by side with you and rail on the proposal if it looked like the UK's, but there are ways to make this work that would significantly benefit the people of this country.
edit: it also looks like they had access to their funds and could choose to do anything they wanted with them. the choices should be limited and the money untouchable, just like most TSP's and 401K's. (i.e. no loans.)