“Here is a short tale of how the way Americans save for retirement has changed over the last couple of generations. It helps explain what the Obama administration is up to with a new initiative this week:

“Once upon a time, companies took it as their responsibility to ensure that their workers could enjoy a comfortable retirement. They socked money away in a pension plan that paid longtime employees a healthy fraction of their salary from the day they retired to the day they died. Employers took on all the risk — the stock market dropping, people living longer than expected.

“And then along came new vehicles like the 401(k) and the Individual Retirement Account. These allowed ordinary Americans to take charge of their retirement savings themselves — to put money into tax-advantaged accounts and withdraw it when needed. But they also left people exposed to the vicissitudes of markets, the risk of saving too little or investing poorly, not to mention the possibility of outliving their savings.

“People were also at risk of getting advice from venal investment advisers guiding them toward investments with high fees or high risk because those products provided the advisers with high, frequently undisclosed commissions.

“The Labor Department said on Monday that it would try to do something about that last problem. It has set to work on rules that would assign a “fiduciary duty” to investment managers who handle retirement savings accounts. That means that they would need to put their clients in suitable investment products, and could be sued if they didn’t.”

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Read the full New York Times “The Upshot article by Neil Irwin here.