Trillions in Retirement Dollars Flow into Opaque Trusts(bloomberg.com) |
Trillions in Retirement Dollars Flow into Opaque Trusts(bloomberg.com) |
Here’s a trust that has 250 billion, but reports prices and does many other things the article says isn’t required: https://workplace.vanguard.com/investments/product-details/f...
Not opaque and it has lower fees than the retail S&P 500 funds.
The worry here seems to be on a systemic level, rather. No one knows how much in aggregate is in these types of trusts nor how it is in aggregate allocated. Which may be a concern from a systemwide risk management pov but far less so for an individual worker.
Since that trust is tracking the S&P 500, it has to be literally equivalent to its VOO ETF counterpart. If it ever rebalanced in a way that no longer tracked the S&P, or even mysteriously changed disclosure in some way, investors would dump it the next day (for an index fund that is literally the same except for expense ratio and disclosure rules).
Moreover, everything in that trust is quite obviously publicly traded companies. The article is about retirement funds gaining access to private markets[1].
tldr; this ain't that.
1: clarification edit. Also, my gut tells me I should have written that as "private markets gaining access to retirement funds" but I really don't know enough about it.
To adapt a popular phrase to personal finance, "If you don't understand the product, you are the product."
am I super biased or fully drank the Kool aid if I believe entrepreneurs are the solution to many of society's ills?
Society's ills tend to concentrate around people with no money or resources. There's no profit to be had solving their problems, so entrepreneurs are not interested.
Non-profits on the other hand, depend on the existince of the problem to justify their own existence. So they are not well-motivated to solve those problems, quite the opposite in fact.
They're completely different groups (except finance entrepreneurs I guess), and it's the former that causes a lot of societal problems (although, arguably, the people whose money they manage are just as responsible, if not more so).
> In addition, Congress is proposing a path to let CITs gobble up even more of America’s retirement savings. A current move by US lawmakers to allow the pots of public school and nonprofit employees into the trusts has been described by one member of Congress as “the single largest deregulatory action we have seen in years.”
This is corruption in action. Corrupt leaders are quietly attempting to make a profit off of citizens' retirement plans, with no plan to protect those citizens once the market inevitably implodes.
How so? Defined contribution allows you to put in more than you get out. I don't contest the taxpayer-funded part.
There were some issues with that in The Great Recession: https://en.wikipedia.org/wiki/2008_financial_crisis.
> Disadvantages include less transparency than traditional mutual funds, difficulty tracking performance, and less oversight of management.
So less verifiable.
That's just what you want to see related to money that millions depend on for retirement. /s