The 401(k)/403(b) Investment Manual: Book Review

In the almost 7 years I have been writing this blog, I have written a number of book reviews about 401(k) plans and investing that have tracked the retirement plan industry.

Not surprising since all of the authors are experienced, independent professionals that have something - let's make that a lot - to say, and have significantly added to the dialogue about retirement savings. All of which are well worth the purchase price in either their print or digital versions.

Now here's another. It's James Watkin's recently published book, The 401(k)/403(b) Investment Manual.

In addition to meeting all of the aforementioned characteristics, the subtitle adds another dimension: What Plan Participants and Plan Sponsors REALLY Need to Know. It's one of the few recent books that speaks to both the employer and the 401(k) participant.

Jim is both an attorney and investment professional with a string of professional designations, and his book focuses on:

  1. Helping both employers and 401(k) participants better understand the financial service industry, and
  2. Doing so in a relatively short period of time.

You can buy it on Amazon for $13.23 with two day delivery if you're an Amazon Prime member.

You can also follow Jim on his two blogs:

Posted In 401(k) Plans , 403(b) Plans , Book Reviews , Fiduciary Issues
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If you’re in and around the 401(k) world, you know who Chris Carosa, CFTA, is. And if you don’t you should. Most of us know him as a prolific author who is the Chief Contributing Editor of, a superb source of information and commentary about the fiduciary aspects of retirement plans.

Chris now has put it all together in his new book, 401(k) FIDUCIARY SOLUTIONS, which covers all 401(k) compliance issues (and how to deal with them), in a single reference source, the official publication date of which is today.

So what’s exactly in his book? The book’s subtitle says it all:

Expert Guidance for 401(k) Plan Sponsors on How to Effectively and Safely Manage Plan Compliance and Investments by Sharing the Fiduciary Burden with Experienced Professionals

Here are just some of the nuggets found in the 320 pages that comprise Chris’ book:

  • The Best Way 401(k) Plan Sponsors Can Benchmark Their Plans
  • 4 Essential Elements the DOL Requires of Every Retirement Plan
  • 5 Important Duties Every ERISA Fiduciary Must Fulfill
  • Everything an ERISA/401(k) Fiduciary Needs to Know About
  • Who Is and Who Isn’t a Registered Investment Adviser?
  • How Should a 401(k) Plan Sponsor Construct an Appropriate Investment Policy Statement?
  • 3 Reasons Why the 401(k) Fiduciary Should Use Both Active and Passive Funds to Reduce 
  • Avoiding Decision Paralysis: How to Create the Ideal 401(k) Plan Option Menu
  • 3 Ways 401(k) Plan Sponsors Can Help Employees Make Better Investment Decisions

You get the picture.

So where to get the book? It’s available on Amazon, of course, but Chris is offering a special $5 discount off the $34.95 retail price through April 30, 2012. You can click here, and then enter the $5 coupon code: 29WLLWA9.

Posted In 401(k) Plans , Book Reviews , Fiduciary Issues
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FROM VISION TO EXIT: The Entrepreneur's Guide to Building and Selling A Business: Book Review

The recent, premature death of Steve Jobs brought the concept of entrepreneurship back into our economic lexicon.

Tim Kane wrote about Steve Jobs after his retirement, but before his death, in Growthology, the blog created by the Kaufmann Foundation of Entrepreneurship, said:

The American economy has been the strongest in the world for nearly a hundred years.  Its growth has been built on the innovations of great entrepreneurs like Henry Ford and the Wright brothers. Thanks to the boomer entrepreneurs, that legacy has been reaffirmed.  Best of all, we now know that hard work and competitiveness are what matter, not class. Jobs represents the triumph of intelligence, of merit, over fate. You could not script the American dream with a more compelling central character.

But it's not just the American economy that has been positively impacted by entrepreneurial enterprise. Entrepreneurship has gone global.

The spotlight on a global effort to promote entrepreneurial activity to foster innovation and create jobs takes place this week starting today, November 14 and ending November 20 under the umbrella Global Entrepreneurship Week (GEW). The URL, by the way, is fittingly,

GEW is the world’s largest celebration of the innovators and job creators. This initiative, launched in 2008 by former UK Prime Minister Gordon Brown and Carl Schramm, the president and CEO of the aforementioned Kauffman Foundation, now involves 115 countries with nearly 24,000 partner organizations planning more than 37,000 activities that directly engage more than 7 million people.

That it's a global movement is evidenced by the book pictured above, The Entrepreneur's Guide to Building and Selling A Business, that was recently published in the U.K. I spoke to the author, Guy Rigby, last week via Skype.

Guy said that that he's directed his book to those business owners who understand that it takes more than a great idea for their businesses to have long-term success. He knows of what he speaks.

Guy is a chartered accountant (the U.K equivalent of our CPA). He's has had an unusually varied career as a business owner, advisor to entrepreneurs, and someone who has built and sold his owner accountancy firm. He now heads up the entrepreneurial services group at Smith & Williamson, a diversified financial services group based in the U.K.

Guy says in the Introduction that

These experiences have driven me to write this book. It's not just a book for start-ups, although much of its content is relevant to them. It's main purpose is to help established businesses - those that have already overcome the initial obstacles of foundation. It recognizes that if you want to build a great business, there are a host of things you'll need to control and do better than anyone else. 

Guy's book provides a road map to building a great business. There's no short-cuts to this goal, but his book can help cut down the number of  potholes, the detours and the tolls.

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Book Review: THE VIGILANT INVESTOR: A Former SEC Enforcer Reveals How To Fraud Proof-Your Investments

My blogging buddy security lawyer Bill Singer on his blog, Broke and Broker, An Irreverent Wall Street Blog (always a good read), posts frequently about investment scams and scoundrels. In one of his latest, Bill writes that Feds Bust Bank Guarantee Scam.

But the Feds don’t have the manpower and resources to get to all of the $40 billion a year that the FBI says investors lose to fraud. In other words, watch out, you’re on your own.

So how do you go about protecting yourself?  Educate yourself, and here's an excellent starting point.

It's Pat Huddleston's recently published book pictured above, THE VIGILANT INVESTOR: A Former SEC Enforcer Reveals How To Fraud Proof-Your Investments.

Intriguing title, eh? But before I tell you about the book itself, let me tell you a little about Pat and how this book came to be written.

After leaving the U.S. Securities and Exchange Commission where he was an Enforcement Branch Chief, Pat was a private attorney for ten years representing defrauded investors. As Pat tells it in the Introduction, he closed his law practice in July 2006 after meeting with a 70-year old man who lost his entire savings in a Ponzi scheme. But since the con man had no assets to go after, chances for recovery were slim.

So says Pat, that was when he launched Investor's Watchdog, LLC, a firm providing investment protection services to investors and subsequently acting as court-appointed receivers in SEC fraud cases.

Pat's experience and writing style has resulted in a book from which investors can learn how to better protect themselves. He uses real stories and provides checklists in his book organized in two easily readable sections:

  • PART 1: The Wide World of Fraud: First Steps and Advanced Tactics on the Path to Vigilant Investing
  • PART 2: The Securities Industry: Hunting the Wolf with the Million-Dollar Smile

It's not just seniors that are vulnerable, of course. Retirement plans can be at risk also. In fact, Pat estimates that approximately 20% of investment fraud is perpetrated against retirement plans including small plans.

Attorney and Susan Wynn wrote about that very subject in February 2009 in her post, Madoff Victims Include Small Pension Plans. Note her comment about the efficacy of the enforcement agencies:

One of the interesting points of the Madoff story when it comes to retirement and pension plans is that none of the 4 governmental agencies which regulate and audit retirement and pension plans saw Madoff coming.

So if you're a fiduciary of a retirement plan, in addition to Pat's book, there are other resources available. Here's an excellent one, the webcast, Fiduciary Lessons Learned from Scoundrels and Thieves presented in 2009 by Blaine Aikin and Rich Lynch, CEO and COO respectively of fi360.

Posted In 401(k) Plans , Book Reviews , Cash Balance Plans , Defined Benefit Pension Plans
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How Am I EVER Going to Retire? (Book Review)

That's Bob Walker on the cover of his new book, How Am I EVER Going to Retire?

If you're in the investment business and have had – or have – to pass the Series 6, 7, 63, 65, or 66, you may know who Bob is.

He's the owner of Pass The Test, Inc., the Chicago-based company who produces books, practice exams, and audio CD's to help pass these tests.

And he does so in the most effective matter possible – in plain English. A result, no doubt, of his background as a teacher with a Fine Arts Masters Degree in Creative Writing from the University of Oregon.

Bob has now turned his attention beyond the investment industry. His book, How Am I EVER Going to Retire?, available in a Kindle edition from Amazon, is directed towards the individual who has either not started investing yet, or is a participant in his company's 401(k) plan that he doesn't understand or may not even participate in.

In an understandable, easy to read manner, Bob explains the essentials:

  1. Types of Investments
  2. Mutual Funds
  3. Types of Accounts
  4. Annuities
  5. Investment Approaches
  6. The Investment Industry
  7. The Regulators
  8. Don't Get Took
  9. More Types of Investments
  10. Defense Wins the Game

It may be the best $5.99 investment someone who needs to get started saving for retirement can make.

Posted In 401(k) Plans , 403(b) Plans , Book Reviews
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Reengineering Health Care (Book Review)

This is a blog about retirement plans. So why, you might ask, am I reviewing a book about health care? I’m certainly not an expert on this complicated topic. But I am an expert on paying for it as a business owner, as a health care consumer, and an expert on watching client business owners and their employees also deal with it. And as costs and premiums continue to escalate, seeing these same employers and employees shift dollars more into health care at the expense of retirement savings.

So what’s the solution? In the view of many experts, it’s not legislation that will fix health care system in the form of the recently passed Patient Protection and Affordable Care Act (PPACA). Indeed, one expert, Paul Kasriel who is Senior Vice President and Director of Economic Research at The Northern Trust, says the PPACA “primarily represents a redistribution of income from the young and healthy to the under-65 less healthy.”

Others more cynical point to the new 10 percent tax on all indoor tanning sessions starting July 1 as part of PPACA.

Jim Champy and Harry Greenspun, M.D. provide a different approach in their new book, REENGINEERING HEALTH CARE: A Manifesto for Radically Rethinking Health Care Delivery. You may remember Jim Champy as the co-author with Michael Hammer of the 1993 book, RENGINEERING THE CORPORATION: A Manifesto for Business Revolution.

The earlier book certainly lived up to its title as it went on to change the thinking on how companies should structure work. In the process, their book sold more than 3,000,000 copies world wide, spent more than a year on The New York Times Best Seller List, and was translated into 17 languages.

Champy and Greenspun apply the same pioneering reengineering methodology to show that the health care industry is rife with opportunity for radical redesign to enhance quality and lower costs dramatically. Reengineering can improve the system in ways that government can’t by focusing on three main areas:

  • How technology can create more seamless, accessible, valued, and sustainable health care systems and avoid technology’s pitfalls.
  • How processes focusing on prevention and wellness and less on chronic disease and hospitals can better meet needs of patients.
  • How the skills and behavior of the people who deliver health care can be tapped to replace outmoded ways with the talent, hopes, and ideas of a new generation.

From my vintage point as a business owner and health care consumer, my vote is for reengineering rather than "reform". Here is a link to the book at Amazon if you want to make up your own mind and a link to its predecessor

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Save Your Retirement: What to Do If You Haven't Saved Enough or If Your Investments Were Devastated by the Market Meltdown (Book Review)

The Employee Benefit Research Institute (EBRI), an independent non-partisan research organization, in their annual Retirement Confidence Survey (RCS) has been asking workers how confident they are in having enough money for a comfortable retirement since 1993.

And in today’s economy, it should be no surprise that EBRI reported The 2009 Retirement Confidence Survey: Economy Drives Confidence to Record Lows; Many Looking to Work Longer. The Executive Summary stated

Workers who say they are very confident about having enough money for a comfortable retirement this year hit the lowest level in 2009 (13 percent) since the Retirement Confidence Survey started asking the question in 1993, continuing a two-year decline. Retirees also posted a new low in confidence about having a financially secure retirement, with only 20 percent now saying they are very confident (down from 41 percent in 2007).

The 2009 RCS reports that workers who have lost confidence in their ability to secure a comfortable are responding as follows:

  • 81% have reduced their expenses
  • 43% are changing the way they invest
  • 38% are working more hours or a second job
  • 25% are saving more money , and
  • 25% are seeking advice from a financial professional

Sounds reasonable, yes? But here’s the rub. The RCS concludes that faulty assumptions and a lack of planning still hinder the ability of many Americans to realistically assess the preparations they need to take to ensure a financially secure retirement.

And that’s the problem that Frank Armstrong, III and Paul B. Brown address in their new book, Save Your Retirement: What To Do If You Haven’t Saved Enough or If Your Investments Were Devastated by the Market Meltdown.

So what’s so special about this book amidst the glut of books about retirement planning? Simply this. It reflects the real life experience of the authors in contrast to the media-created “investment experts” for many of whom the current recession is their first.

Frank Armstrong has more than 35 years of experience in the securities and financial services industry and is the founder and principal of Investor Solutions, Inc., a fee-only registered investment advisor, based in Miami. Paul Brown is a longtime contributor to the New York Times and co-author of the best selling retirement plan guide Grow Rich Slowly. He is a financial expert for, the popular website devoted to the concerns of people over age 40.

There’s nothing magic in their book. It’s just basic, old-school financial management in which Armstrong and Brown respond directly to what I call the “new financial realities” by showing battered investors

  • Where to move their savings
  • How to recalculate what they’ll really need to retire
  • How to assess when they can now afford to retire
  • How they should change their approaches to investing
  • How to use the federal tax system to save more
  • What to expect from Social Security now

So if you’re one of those people worried about how and when you can afford to retire, then this book can be an excellent guide. Here's a link to Amazon if you want to purchase the book, and you can also subscribe to Frank's companion blog, Sink or Swim.

You can also check out other book reviews I’ve done: Josh Itzoe's timely Fixing The 401(k); Fran Hawthorne's controversial Pension Dumping: The Reasons, The Wreckage, The Stakes for Wall Street; and Christian Jarrett’s and Joannah Ginsburg’s This Book Has Issues - Adventures in Popular Psychology.

Posted In 401(k) Plans , Book Reviews , Defined Benefit Pension Plans , Social Security
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This Book Has Issues - Adventures in Popular Psychology: Book Review

So what’s a nice book about psychology doing on a blog like this. Take a seat on the couch, and we can talk about it. 

It’s a small world when it comes to blogging. One day I came across the British Psychological Society's Research Digest Blog, which is written and edited by Christian Jarrett, Ph.D., a British psychologist. I’ve referenced studies that Christian wrote about in several of my blogs. (See One More Reason to Consider A Commuter Transit Benefit, ERISA, It’s Not Elementary, and What We’ve Got Here Is Failure To Communicate.

So when I learned that Christian and his American co-author, Joannah Ginsburg, an American psychotherapist and journalist, published a book, I was eager to see whether it was as interesting and as helpful as the BPS blog. The answer is a resounding yes.


Here’s how the publisher describes it:


This Book Has Issues delves deep into the human consciousness and casts light onto the reasons why we think, feel, and act the way we do. Packed with illuminating real-life examples, introductions to groundbreaking psychologists, and plenty of experiments and tests to unveil the way your own mind works, This Book Has Issues has the power not just to intrigue and entertain, but also to change the way you think. Divided into eight fascinating chapters, This Book Has Issues covers everything from the real reasons we fall in love to the science behind a good night’s sleep. From extreme disorders to the truth behind the ways we live our everyday lives, This Book Has Issues takes you on a journey through the amazing landscape of the mind.


That’s from the publisher's marketing department. So let me translate it from “popular psychology” into “retirement plan psychology”.


The success of any retirement plan depends on how the needs and expectation of the plan sponsor, participants, and beneficiaries can be met. In other words, the human factor drives the plan’s success.


So in that context, if you want to:

  • Learn how our brains can sometimes make mistakes
  • Get tips to boost your memory abilities
  • How to look at problems some people have with language and counting
  • Challenge your basic ideas on behavior and communication
  • Get the latest research on relationship, leadership, and brainstorming
  • Get to know yourself better using a range of tests
  • Learn how to deal better with stress
  • Learn how to get better sleep

Then This Book Has Issues is for you.


It travels well also. You can listen to two excellent book reviews from Radio New Zealand (MP3 file), and on the Australian radio show, Faster Than Light.


Christian’s and Joannah’s book is available in the U.S. from Barnes and Noble and in the U.K from Amazon U.K.


Author's Note: Here are links to the other book reviews I've done: Josh Itzoe's timely Fixing The 401(k) and Fran Hawthorne's controversial Pension Dumping: The Reasons, The Wreckage, The Stakes for Wall Street.


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Fixing The 401(k): Book Review

I was one of those commentators who ended last year on a “glass half empty” note when I characterized the 2008 retirement plan year as The Good, the Bad, and the Ugly. Some commentators like Mark Miller were much more direct. Mr. Miller ended the year in his column that appears on his website, RetirementRevised, by writing 2008 ends with alarming retirement benefit trends.

But this is a new year when we can look ahead – and indeed, look ahead with optimism. The present retirement plan system can be fixed. And whether or not changes are made on either the legislative or regulatory level, or waiting for whenever the economy improves, the process can and should start now.

Josh Itzoe is among those of us that believe that many of the “broken” retirement plans, i.e., 401(k) plans, can be fixed by plan sponsors and other fiduciaries. Josh is both a CFP® and AIF® and is a Principal of Greenspring Wealth Management, Inc., a registered investment advisory firm and Independent Fiduciary in Towson, MD.

And to the point of this post, Josh is also the author of a recently published book, Fixing The 401(k): What Fiduciaries Must Know (And Do) To Help Employees Retire Successfully. So what’s so special about this book amidst all of the many 401(k) books out there. Here’s how Matthew D. Hutchison, MS, CPC, AIFA®, CRC®, answers that question in his Forward to the book.

There are many books about 401(k) plans. There are hundreds of thousands of professionals who want to invest your 401(k) assets. Very few of them, unfortunately, embrace a “participant first” approach to delivering retirement plan services. That is what makes this book so special. It is focused on one thing: Protecting future participant benefits. The goal of this book is to serve the best interests of nearly fifty million individual participants.

Those of us who have been around 401(k) plans for a while know who Matthew Hutcheson is. He’s an Indepenent Fiduciary himself and a published author and internationally recognized authority on retirement plans and their associated fiduciary issues. He's also testified before Congress on these matters.

There’s nothing magic in Josh’s book. It’s just basic, old-school procedural prudence, the process by which fiduciaries act solely in the best interests of plan participants and their beneficiaries. It’s not only good risk management for fiduciaries, it's just good management period.

 Here are some of the areas that Josh covers in his book:

  • The basic fiduciary responsibilities outlined under ERISA.
  • The roles, responsibilities, and motivations of the various people/companies involved in selling and servicing these plans.
  • Which questions to ask and what information to gather in order to uncover and reduce the various fees and expenses associated with 401(k) plans.
  • How to design a 401(k) plan to deliver successful outcomes.
  • How to help employees use the plan most effectively.

So if you’re a plan sponsor concerned about both your personal responsibilities and your participants’ retirement security, then this book can be an excellent guide.  Here's a link to Amazon if you want to purchase the book. You can also follow Josh through his new blog of the same name, Fixing The 401(k).  

Posted In 401(k) Plans , Book Reviews , Pension Protection Act of 2006
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Pension Dumping: The Reasons, The Wreckage, the Stakes for Wall Street by Fran Hawthorne (Book Review)

Fran Hawthorne is an accomplished journalist who over the last 20 years has specialized in finding and writing about the intersection of corporate America and timely and sometimes contentious social issues. She’s written articles for publications such as Fortune, Business Week, and Institutional Investor and has authored books on such issues as the dangers of obesity drugs, the trade-off between campaign contributions and state bond underwriting, and Medicaid manipulation.

Now Ms. Hawthorne has turned her attention to an important issue that in today’s economy isn’t going away anytime soon, pension plan terminations. In her new book, Pension Dumping: The Reasons, the Wreckage, the Stakes for Wall Street, Ms. Hawthorne takes an in-depth look on what happens when financially troubled companies terminate their defined benefit pension plans through bankruptcy.

I had the opportunity to interview Ms. Hawthorne who has, no doubt, a point of view starting with the title of her book. She builds a case about why pension dumping (her term) has become an increasingly common practice in the wake of bankruptcy and how investors are profiting off the wreckage.

Agree or disagree with her, her well researched book which includes case studies and interviews provides analysis and insight on the complicated and competing dynamics involved with the termination of a defined benefit pension plan:

  • Competing interests in bankruptcy court
  • The choices that unions have to make
  • The financial burdens assumed by the Pension Benefit Guaranty Corporation
  • The risks that investors take and the returns they look for
  • The issues that companies must deal with as they restructure

Ms. Hawthorne’s book should appeal to anyone involved with pension plans, e.g., CEOs, CFOs, HR professionals, union leaders, professional advisors, and policy makers. And if so, here is a link to Amazon.

Posted In Book Reviews , Defined Benefit Pension Plans , Pension Protection Act of 2006
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