401(k) / group annuity plans

Forbes has a disturbing article on certain 401(k) plans set up as "group annuities" by insurance companies. By their account, "Among 401(k) plans with assets of less than $250 million, group annuity-style menus account for 55% of the market and are sold by axa Equitable, Lincoln Financial and other insurers." These group annuity plans charge ridiculous fees and often lock participants into those fees for years.

Not all 401(k) plans with annuities are necessarily bad. But some sure are. If you're in a plan with annuity investment choices (or one that is run by an insurance company), you should read the article and ask appropriate questions to make sure you're not in a plan like the ones they describe.

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Mark Biller is Sound Mind Investing's Executive Editor. Visit www.soundmindinvesting.com to learn more.