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Post Info TOPIC: Merrill Lynch hoses employee 401K plan
bucko12400


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Merrill Lynch hoses employee 401K plan
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noKroger recently notified participants in their employee 401K plan of changes to the investment options for the plan offered by Merrill Lynch, which was purchased by Bank of America during the last financial meltdown (BOA was forced by the US government) to keep it out of bancruptcy. The plan, which is available to both hourly and union participants, is being restructured and scrapping the six index funds which were created for Kroger investors and replacing them with two Blackrock Funds. The index funds were created to provide lower cost investment platforms which mirrored major stock indices. While the notice from Kroger trupets the value of variety and diversity in stock portfolios, the fund choices shrink by two-thirds and the replacement funds don't necessarily have anything to do with the investment categories they are replacing. All of this will take place automatically on April 12th.

The first thing that is apparent is that the change is all about Merrill Lynch and BOA and not for the benefit of the employee investors. The Kroger funds that mirror the Russell 2000, S&P 400 and S&P 500 are primarily domestic equity funds. They are being redirected into a Blackrock Fund which is focused on International (foreign) stocks. Only one of the four funds being transfered here has a similar investment direction. The other Blackrock Fund combines Large-cap and Medium & Small cap funds into a single fund covering all capitalizations of US equities. So far this year these various funds have done very well for Kroger's employees.  They offer the opportunity to fine tune investment choices and show good returns for investors. This menu of investment choices has served employees reasonably well and there is no obvious reason to make the changes other than the reduced cost to Merrill Lynch to consolidate from six to two funds under their Blackrock division. Unfortunately this removes control for investment direction from Kroger investors and places it in the hands of Merrill Lynch which, in my view has been a mediocre financial partner for Kroger employees at best. Since we have not been given any choice about this change it is important that participants look at their current investment strategy and make any changes necessary to avoid having their investments redirected in ways they do not intend. Although it is impossible to say what the effect of these changes will mean for employee investors, it is hard to see how they can improve on current returns, and given the volatility of foreign markets, offer risks that many have no interest in taking.



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Brad Owens
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You did a great job explaining all this, and in words that are easily understood by us who are investment-jargon challenged.  But....if you are a Kroger employee....why??  Sounds like you should be earning some big bucks with an investment firm.  Good job!  Thanks!



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Anonymous

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Why are you in the Kroger 401k program? Kroger does not contribute to your 401k at the hourly rate so why even bother with it other than the convinience of having it taken out of your paycheck and possibly a little break on taxes? Start you own investment fund with someone you trust and with the investments you want and go with it. I would  be more worried about the yea hoos from the unions that have control over our pensions, which continue to be underfunded and out performed on the investment side.



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Anonymous

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I currently have three accounts with the Kroger retirement plan. The orignial defined benefit plan that ran for about three years before being changed was funded entirely by Kroger and is annuitized on retirement for a monthly payment for life. Because it was so short lived and contributions were only from Kroger,  it will yield a monthly payment of just over $100. When the federal government put rules in place to protect these pensions from comporate raiding, Kroger abandoned this program and substituted a defined contribution plan where they would match a limitied amount of the non-union employee contribution. The bulk of my pension contributions are in this fund. I am unable to move or roll over these funds until I retire and leave Kroger employment. I do have an IRA account to which I can contribute up to the maximum allowed, but this is less than what it is possible to contribute to an employer sponsored 401K. Yes, it is convenient to use the employee program and the funds available have had a lower cost and reasonable return. The last four years I have been a union employee and have made contributions which are a percentage of my weekly check. So far this year for less that the first quarter, my returns using four domestic index funds currently available are in excess of 11%. None of the Merrill Lynch dated retirement funds even begin to approach that level of return, even for the 1255 date! So the current choices have done very well for me the last two years. I am not so certain about what will happen with the new consolidated funds. All of the funds offered with a specific focus on foreign investment have done very poorly. This is the direction many investors money will be taken when they implement the plan described. Being aware of this change is the first step in taking charge of your investment outcome. All pension plans, both union and private, were heavily harmed by the econimic disaster known as the great recession. These last two years have been recovery years and those who have been in the market have been able to recoup some of their losses from that time. My point is that you need to pay attention to what is happening to your account and make wise choices for your funds.

 

 

 



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Anonymous

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Anonymous wrote:

I currently have three accounts with the Kroger retirement plan. The orignial defined benefit plan that ran for about three years before being changed was funded entirely by Kroger and is annuitized on retirement for a monthly payment for life. Because it was so short lived and contributions were only from Kroger,  it will yield a monthly payment of just over $100. When the federal government put rules in place to protect these pensions from comporate raiding, Kroger abandoned this program and substituted a defined contribution plan where they would match a limitied amount of the non-union employee contribution. The bulk of my pension contributions are in this fund. I am unable to move or roll over these funds until I retire and leave Kroger employment. I do have an IRA account to which I can contribute up to the maximum allowed, but this is less than what it is possible to contribute to an employer sponsored 401K. Yes, it is convenient to use the employee program and the funds available have had a lower cost and reasonable return. The last four years I have been a union employee and have made contributions which are a percentage of my weekly check. So far this year for less that the first quarter, my returns using four domestic index funds currently available are in excess of 11%. None of the Merrill Lynch dated retirement funds even begin to approach that level of return, even for the 2055 date! So the current choices have done very well for me the last two years. I am not so certain about what will happen with the new consolidated funds. All of the funds offered with a specific focus on foreign investment have done very poorly. This is the direction many investors money will be taken when they implement the plan described. Being aware of this change is the first step in taking charge of your investment outcome. All pension plans, both union and private, were heavily harmed by the econimic disaster known as the great recession. These last two years have been recovery years and those who have been in the market have been able to recoup some of their losses from that time. My point is that you need to pay attention to what is happening to your account and make wise choices for your funds.

 

 

 

 



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arceB


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401(k) plan is something needed for retirement. However, some are afraid of the complexity of the plan. According to press releases from several outlets, 401(k) plans have been accumulating more earnings over the past year. This is good news for people with retirement accounts. Read it here: 401(k) Plans.



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Anonymous

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What is the current Kroger 401k match?



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AnonymousCutter


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None.

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My Views and Opinions do not reflect that of the Kroger company. I'm an indivdual expressing my 1st amendment right.

Visit http://www.krogertalk.com
Anonymous

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5%



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keith shaw jr

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I worked for Kroger in Tenn in 1995 or 96. I never closed out my 401 and wondered if there was still such an account. Please contact me at keithshaw39@rocketmail.com   Thank you

 



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Lord_Uboat


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keith shaw jr wrote:

I worked for Kroger in Tenn in 1995 or 96. I never closed out my 401 and wondered if there was still such an account. Please contact me at keithshaw39@rocketmail.com   Thank you

 

 It would have already been disbursed to you as a check with taxes withheld by now. You get to choose to get that check or have a rollover option within 90 days of quitting. And good God that was 20 years ago!



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Just one more box
Anonymous

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Does the Kroger 401k plan allow for pre-retirement withdrawals at age 59-1/2 to be transferred to an IRA?  This can provide more choices for investment and also tax benefits for beneficiaries should an untimely death occur.



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Anonymous

Date:
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Kroger contributes where I work

 



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Anonymous

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How long do you have to work for kroger before you can start your 401k



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