Hacker News new | past | comments | ask | show | jobs | submit login

401(k) plans have individual named customer accounts and strict auditing standards. A Bernie Madoff type scam isn't really possible. Even if Vanguard or Fidelity goes bankrupt the customer accounts will still exist. There's no counterparty risk (except for cash actively being transferred in or out).



Even if you have full confidence in auditors and regulators (Arthur Andersen?) that only guarantees that you own the contents of the account. What about what's in those accounts? How familiar are most people with the details of the various mutual funds and/or ETFs that might be held in their accounts? How complex are the webs of obligations inside those funds? If one or more large financial institutions were to have a Lehmann Brothers situation how long might the assets in some of those funds be tied up in litigation, even if they were actually still there?

These concerns are all likely fairly low probability but there's certainly a whole range of possible scenarios between "my retirement funds are completely secure" and "I'm dead in a global thermonuclear apocalypse".


There are enough people who depend on those for their income that congress would do something. I don't know what, but the litigation would be the top concern of congress and that pressure would ensure that things got wrapped up quick somehow.




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: