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Purpose The purpose of this paper is to analyze the article More Employees On Their Own by Albert B Crenshaw This paper will discuss the effects that the volatile financial market specifically the 401k plan is having on industries and their employees Introduction A 401k plan permits employees to choose to defer a portion of their wages on a pretax basis The plan must be part of a qualified profit-sharing plan a stock bonus plan a pre-ERISA money purchase pension plan or a rural cooperative plan The ability of the employer to match contributions has generated interest in the plan at all employee levels This is important because 401k plans include strict tests that require lower paid employees to defer compensation under the plan in proportion to highly paid employees 401kcom 2003 The major benefit to employees is that they are not taxed currently on the portion of compensation that is placed in the plan An employee has the option of choosing between cash or future benefits on a year-to-year basis This protects an employee when faced with unexpected immediate financial needs 401kcom 2003 Article Analysis In the beginning the 401k plan looked appealing to most employees Workers could put money aside and their employer might even contribute The money to be put away in mutual funds or savings accounts was the employees for better or worse Crenshaw 2003 But three years into the worst bear market since the Great Depression many workers are finding that the risks of investing have not died - they were only sleeping Crenshaw 2003 Now in the wake of liability risks stock market volatility and potential legislation United States employers are reassessing their 401k plan priorities for 2003 Additionally those who participate in the plan are being hit hard Employees have learned a lot about 401k plans in the last year or so They have learned that the value of their accounts can drop like
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