I believe most observers would conclude that 401(k) plans are one of the best inventions to ever come out of Washington, D.C. Many retirement nest eggs have grown to a considerable sum over the years, largely due to regular savings, the deferred tax advantage that 401(k) plans provide and matching contributions.

Only very recently have DC plans begun to take a bad rap. Lots of questions have been raised about whether 401(k) plans, in their current form, can adequately provide retirement income for employees. The concern about this on the part of some has led to the current trend to begin treating DC plans like DB plans.

The recently proposed Lifetime Income Disclosure Act would require 401(k) plan sponsors to project the monthly income their employees could expect at retirement based on their 401(k) balances.

While projecting retirement income at any time is a worthwhile exercise, do we need legislation to dictate this exercise and what is the benefit of such an exercise unless it takes into account the many variables that underlie 401(k) accounts?

DC plans are not DB plans, and they're not like Social Security. DB plans and Social Security are built on tidy formulas that take into account years of service and pay, where DC plans have no such formula.

How well one does in accumulating wealth through a 401(k) plan largely hinges the individual's ability and discipline to save, investment savvy and market conditions during the accumulation years.

Any attempt to provide a canned answer for how account balances translate into annuities would be tricky at best, and tragic at worst if the projection is materially misleading.

The fact that there is a push to show projected annuity amounts in DC plans makes me question whether those in charge really appreciate the difference between DC and DB plans.

Along with this proposal for creating annuity numbers around 401(k) account balances, there is also discussion about creating a fund, not unlike the FDIC and sounding somewhat like the PBGC, that would back up guarantees from insurers who provide annuities in 401(k) plans.

Others suggest that longevity insurance, providing income for retirees beyond a certain age, be considered as a feature in 401(k) plans.

401(k) plans took a tough hit during the recession, but what investment vehicles didn't? Given the generally successful history of the 401(k), we need to make sure we aren't overreacting to a rather short bad patch, and changing our DC plans into something they were never intended to be.

If it's really DB plans we want, we should go back and clean up the DB system and encourage employers again to make that tool their primary retirement investment tool.

The best recommendation for success with a 401(k) program, without turning it into a DB plan, is to provide employees with education, education and more education.

Only by providing first-rate education will employers be able to get employees to make the best possible choices for themselves when it comes to fund selection, diversification, rebalancing, taking a long-term approach to investing, or any other myriad issues that lead one to become a successful investor, even in the most difficult times.

Contributing Editor Wayne Hanson, SPHR, CEPF, is an HR consultant with a special interest in financial literacy. He has provided support to the private sector in a number of different capacities.

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