One of my biggest problems is that what you say is true in the way you mean it but it isn't really true. The way an employer gets at it is passing along all plan costs to the employees who then have their accounts debited every quarter for those costs. I think making employees pay for the benefit really lessens its effectiveness as a benefit (particularly if the plan has no matching).
Another way this is a problem is that the fees are typically debited from the employees based on their balance in an account. So if a 20 person company has five employees with very large balances and fifteen employees with very small balances then the five employees with the larger balances are subsidizing the other fifteen. You end up penalizing the people who have been the most dedicated to saving for retirement.
It seems like Guideline and OctaveWealth (mentioned in the comments) combat this by charging a recordkeeper-style per-participant fee rather than the percentage of assets that are typically charged by advisors and custodians.
Actually guideline is charging the participant fee as 3bps, which is a percentage of assets (but this is spectacularly low). They are charging the employer directly the per participant fee.
They've the power to add taxes to 401(k)/IRA withdrawals in the future. I think it's unlikely - it'd be political death to whoever proposed it - but it's theoretically within their abilities.
They could realistically change the tax structure or even the retirement age(s) at which you could withdraw the funds. But if there were another mega-stressor to the financial system in the future, it seems that this pool of trillions of dollars would be ripe for the picking. Let's face it, lobbyists get what they want. Not the people. So if the bank's risky investments cause a panic and the only thing preventing an economic meltdown is the re-purposing of 401k funds....well...
I highly doubt it would be that direct. A realistic way to do this would be to change the tax structure based on age. Meaning, the only way to extract the money without incurring severe penalty would be to do so after some advanced age. Then put in place a rule that any funds left after death become part of a new social security style safety net. Likely for the ever-increasing number of baby boomers who are retiring and living longer than ever.
Yeah, that's my point. You're talking about a retirement plan that impacts retired people who vote in droves. For the considerable future, those retirement age people will be baby boomers. They also happen to run the government. So why would it be unreasonable to expect them to pass laws that are favorable to them during their retirement as opposed to our retirement in 20/30/40 years.
401k plans typically consist of employee and employer matching contributions. But in any case, the things that stops you from fully accessing this money of your own free will are laws. Laws can be changed. I'm just wondering if today we're being as naive about 401k realities as people were about social security and pensions a generation, or two, ago.
Employer money is going to be a smaller amount of your 401k, if offered, and not always guaranteed, as sometimes subject to vesting so you wont' necessarily get it, but even so that's a stark contrast to pensions and social security, where all of your money is coming from someone else in the future.
I don't really see it as a stark contrast. Pensions and social security may be accounts where money is coming from someone else in the future. But a 401k is only semantically different. You do not own your 401k account in a real sense. That money is locked and kept away from you. You can only withdraw that money according to the rules in place at the time of the withdrawal. If you wanted to take that money out now, you would be paying the penalties in place that exist today. In 20+ years from now, when you intend to withdraw, you will be doing so with the laws in place at that time. And what those laws will be are unknown at the time. The same as current conditions were unknown to partakers in pension funds and social security a generation, or two, ago.
Another way this is a problem is that the fees are typically debited from the employees based on their balance in an account. So if a 20 person company has five employees with very large balances and fifteen employees with very small balances then the five employees with the larger balances are subsidizing the other fifteen. You end up penalizing the people who have been the most dedicated to saving for retirement.
It seems like Guideline and OctaveWealth (mentioned in the comments) combat this by charging a recordkeeper-style per-participant fee rather than the percentage of assets that are typically charged by advisors and custodians.