Jane <googlemail2003@[EMAIL PROTECTED]
> writes:
> 90% of our savings is in a 401k. A very large ****tion is in the "John
> Hancock Fixed Income Fund". Is there any protection for this money?
> I'm not talking about protection against a drop in the interest rate,
> I mean if JH goes down the tubes does our money go with it?
You have several entities involved here.
First off, your employer (and those who have a claim on
your employer's assets) have no claim on the assets in
the 401k.
Second, the administrator of the 401k doesn't either.
Third, the funds the 401k are invested in are (generally)
share classes of mutual funds. A mutual fund is a distinct
cor****ation - separate from both the manager of the fund
and the parent company which sponsored the creation of the
fund. If SomeFundX is a fund offered by SomeFundCompany
and subadvised (managed) by SomeManagerCompany, both
SomeFundCompany and SomeManagerCompany could go under
completely and the assets held by SomeFundX itself are
untouched. In general, at worst, some other company
would take over the responsibilities in managing the
assets and another company may take over other duties
(ie. acting as transfer agent), perhaps ultimately
merging the assets into some other fund to simplify
matters (in which case, your SomeFundX shares may be
swapped for SomeOtherFundX shares).
Your assets are generally as safe as whatever the fund
itself - internally - is invested in. Which isn't to
say that you can't lose money - but that'd generally be
due to the assets inside the fund stinking (ie. suppose
your fund held Bear Sterns bonds...), not due to the
management company (or your employer, or your plan's
administrator) going under. At least with respect to
a typical 401k invested in institutional class shares of
typical mutual funds.
--
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