In a recent blog on the Forbes website titled, Why 401ks Have Failed, the author mentions that 401ks were never meant to be mainstream retirement plans and really shouldn't be necessary. He insinuates they are simply a way for employers to feel good about themselves while employees essentially get shafted.  The reality of 401ks is that if implemented the correct way, they can be a great tool to help employees retire.

A very well respected association in the retirement plan world mentions in the article that the 401k is really the only effective way that Americans have saved over the years. According to them, Americans have over $5 trillion dollars saved in 401ks and over $6 trillion (mostly from 401k rollovers) saved in IRAs. This means that it has been effective for some people. The key is to make it effective for all people that have access to a 401k plan.

So, how do we make the 401k more effective for all plan participants. The first thing that must be done is the financial services/brokerage industry needs to admit there is a problem. For too long, the industry has been trying to justify all the things that actually hurt participants the most in retirement plans.

Another quote from the article sums it up best when it says, "the financial services industry and employers are all too eager to tell us how little we’re saving, yet don’t serve as honest brokers in maximizing our retirement savings. That would require cutting fees, eliminating middlemen, increasing employer contributions and getting rid of the fee structure that is based on assets under management. And above all, the most dangerous part of this equation: Educating employees on how to invest cost- and risk effectively."

Basically, the above quote says that the current structures in place in the majority of the financial services/brokerage industry are not conducive to help plan participants adequately save for retirement.

The good news is that the times are changing. There are some 401k platforms that have evolved to maximize the help provided to plan participants. They have much lower fees, have eliminated middlemen, encourage higher savings and employer contributions, and spend tremendous resources on employee education. The key is for you to find one of those platforms for your pharmacy 401k plan.

For pharmacy 401ks to be successful moving forward, we all need to take a close look at our plans and determine if we can make any of the above changes because these are going to give our employees the best chance to succeed with their retirement aspirations.