What if financial products, like harmful consumer products, were subject to safety recalls? To stimulate national debate, we drafted this recall notice (using a children's toy recall issued by the Consumer Product Safety Commission as our template) and sent it out as a press release. We don't know that there will ever be a recall of 401ks but there can be no denying the harm these plans have inflicted upon America's workers.
NEWS from Benchmark Financial Services: 401k Recall
Office of Information and Public Affairs Ocean Ridge, FL 33435
FOR IMMEDIATE RELEASE Firm's Recall Hotline: (561) 202-0919 October 9, 2008 Release #01-008
Recall of Most of Nation's 401k Plans
Ocean Ridge, FL. - The Center for Investment Management Investigations at Benchmark Financial Services, Inc, with anticipated cooperation of the firms referenced below, today announced a voluntary recall of the following consumer products. Consumers should stop using recalled products immediately unless otherwise instructed.
Name of Products: 401k plans; So-called "Retirement" Plans
Units: Trillions in assets
Manufacturers: Financial services firms globally, assisted by employers
Hazard: Consumer will likely incur excessive fees and poor performance resulting in injury to their financial well-being.
Incidents/Injuries: The Center for Investment Management Investigations has received reports from thousands of consumers of injury to adults (especially older adults approaching retirement), resulting in anxiety, loss of sleep, housing foreclosures and postponement of retirement plans. Hazardous effects of these plans are generally irreversible in older adults.
Description: This recall involves a financial product marketed to America's workers (of all ages) which claimed to provide for their "retirement security." While the product may have some value as a savings vehicle, it will almost certainly not provide for financial security in retirement. Statements that the product will provide retirement security are gross misrepresentations which consumers should disregard. Generally the investment options within the product were sold unaccompanied by the delivery of an owner's manual (a "prospectus") that would have disclosed the risks related to these products. Furthermore, even the prospectuses that related to the investment options falsely represented that they were subject to comprehensive federal regulation that would protect the interests of consumers. In fact, the federal agency that regulates these products (the Securities and Exchange Commission) has been found to be compromised by conflicts of interest. Employers offering the products (401k plans) to their workers generally failed to educate themselves regarding its properties and failed to offer more viable alternatives for their retirement planning.
Sold at: Financial services firms globally; however, predominantly in the United States to American workers.
Manufactured in: Globally by many of the leading financial services firms. Remedy: Consumers should immediately take the recalled 401k plan products to their employers or the manufacturers of these products for refund.