BALTIMORE (Map, News) - Employees invested in company-sponsored 401(k) retirement plans have more choices than ever when making financial decisions.

“Employers are now highly encouraged to provide access to a multiple-manager platform that allows choices, selection and diversity among the 401(k) portfolios of their employees,” said Michael Brooks, founder and president of Timonium-based Brooks Financial Group, Inc.

What this means to employees is the ability to decide what investment fund they want to participate in and who the manager of the fund is, such as John Hancock or Fidelity Financial, for example.

“In 401(k)s, all of the onus is on the employee,” Brooks said. “There is no employer obligation in the end game of this plan.”

Among the more significant changes in the 401(k) game, however, is the “lifestyle fund” that allows individual investors to decide how much risk they are willing to take based on their own financial circumstances and future plans, he said.

“Their prevalence has grown significantly in the past five years and represents the single-largest offering and holding within the 401(k) marketplace for employees,” he said.

Lifestyle funds include higher-risk growth investment funds, moderate-risk funds and more conservative funds that earn often lower but steady rates of return. Investors in 401(k) plans can choose to put a percentage of their money into any of the lifestyle funds, which fund managers can adjust to meet the goals of fund participants, he said.

If, for example, a certain stock held by a growth fund begins to lose value, the fund manager can move the money around the market to minimize loss. The shift is automatic in lifestyle funds, meaning the employee doesn’t have to keep a constant eye on the funds.

Jacob Eddy, a financial adviser with Ameriprise Financial Services Inc. in Annapolis, said 401(k) contributions are important, but not the only financial product workers need to consider.

“They are a great start for retirement, but not the only thing [workers] should be doing,” he said. “You have more control over what you invest in and more options than in the past, but you need to make sure you know what you’re investing in.”

Brooks agreed. Financial planners guide investors and include 401(k) contributions into their overall management process, he said, but charge a fee for their services.

kcarson@baltimoreexaminer.com