Reply #99: with 401(k), usually an employee has some choice

[DemReadingDU]

My 401(k) had several funds to choose from Vanguard. Several bond funds, stock funds, money market fund. An employee can go to the Vanguard site and get info which plans are less risky.


Not so with my company provided pension plan. I have no idea what my employer has directed State Street to invest in which funds. My plan may be invested in risky sub-prime mortgage securities rather than safer U.S. government securities. I have not received any letters saying that my pension is bankrupt, yet.


Did you see this...

1/4/08 State Street Corp. Is Sued Over Pension Fund Losses

The State Street Corporation, which manages $2 trillion for pension funds and other institutions, ousted a senior executive on Thursday and said it would set aside $618 million to cover legal claims stemming from investments tied to mortgage securities.

State Street made the announcement after five clients sued it, claiming they had lost tens of millions of dollars in State Street funds that they were told would be largely invested in risk-free debt like Treasuries. One fund lost 28 percent of its value during the credit troubles in the summer after placing big bets on mortgage-related securities, according to the lawsuits.

The lawsuit asserts that State Street last year used borrowed money to invest in subprime mortgages and related derivative contracts in a fund that was supposed to invest only in Treasuries and corporate bonds.

more...
http://www.nytimes.com/2008/01/04/business/04state.html?