New rules governing money-market mutual funds issued by the Securities and Exchange Commission don’t go into effect for two years. Even so, you should still be concerned about the money-market mutual fund in your company 401(k) retirement plan account.
A money-market fund is designed to earn interest daily, while maintaining a net asset value of $1 per share at all times. Most individual company 401(k) retirement plan participants think of the money-market fund as equivalent to cash.
I read a good summary article titled “Your ‘safe’ money-market fund may be at risk” on Marketwatch.com this morning. Writer Robert Powell writes:
“Well, plan participants who invest in money-market mutual funds should check whether their funds will be among those that will have a floating NAV or a fixed $1 per share NAV. What’s more, they should check whether their money-market fund will have redemption fees and liquidation windows.”
So, there is even more to think about in the investment management of your company 401(k) retirement plan account now and going forward. Several retirement plan experts think that there is no place for a money-market investment in your company 401(k) retirement plan account.
Ric Lager
Lager & Company, Inc.
