‘Retirement Guardrails’ Offers New Perspective on 401(k) Problems

In the book "Retirement Guardrails: How Proactive Fiduciaries Can Improve Plan Outcomes" by Quinn Curtis and Ian Ayres, the authors emphasize the need for guardrails in retirement accounts to steer workers toward better financial decisions. Curtis, a University of Virginia School of Law professor, drew insights from his employer's retirement system for the book. 

The authors suggest that many 401(k) and 403(b) plan sponsors must know how investors utilize their plan menus. They propose implementing measures such as monitoring portfolios for high-risk concentrations, eliminating costly or specialized funds, and warning investors about unusual choices. The UVA retirement plan's transformation from a vast selection of investment options to a more streamlined menu served as a case study for the book. This shift facilitated the transfer of investors to low-cost target-date funds, leading to improved outcomes for both employees and employers.

For more information see Melissa Castro Wyatt “‘Retirement Guardrails’ Offers New Perspective on 401(k) Problems” UVA Law, October 10, 2023.

Special thanks to Naomi Cahn (University of Virginia) for bringing this article to my attention.