Less than half provide estimates of annual retirement income expected from plan balances
Only 5% of those surveyed say the new fee disclosure requirements will lead participants to “make better investment choices”
According to the 2011 Wells Fargo Retirement Plan Sponsor survey, 50% of companies have not measured their employees’ progress, while 32% say they are “analyzing plan participation, balances, and deferral rates.” Only 11% are measuring each employee’s retirement income and comparing it to expected needs; the majority (51%) do not provide employees with estimates of annual retirement income they can expect based on plan balances.
Yet, when asked “what is your primary goal for plan management in 2012?” well over half of the companies surveyed—63%—say it is either to educate employees about how much to save and overall retirement needs or to increase employee savings.
“Employers care about their employees’ ability to retire, but they are not taking enough steps to proactively assess if their employees have enough to retire,” said
Fee disclosures – what’s the impact?
Forty-eight percent of companies that sponsor 401(k) plans say the new requirements for fee disclosures to employees will “have little impact” on plan participants and 49% say “participants will be confused.” Only 5% say the requirements will lead participants to “make better investment choices.”
“We fully support fee transparency and have a strong history of doing so,” said
What are companies most concerned about?
Plan sponsors continue to rate market volatility as the biggest concern (53%) among the various participant retirement risks, played out in the general shift on the part of plan sponsors toward more conservative investments. Forty-two percent of employers surveyed are very concerned about participants not understanding retirement needs, and 40% are very concerned about participants’ ability to make savings last throughout retirement.
“The fact that plan sponsors worry more about market volatility as a threat to the retirement savings of their participants rather than participants’ lack of understanding retirement savings needs suggests plan sponsors don’t understand the root cause of the issue,” said Nordquist. “Participants are better positioned to ride out market cycles when they have a retirement strategy and plan linked to their goals. Understanding the importance of saving enough money each month and allocating investments in a way that is appropriate for age and risk tolerance will help employees weather short-term market volatility.”
The Wells Fargo Retirement Plan sponsor survey and its resulting analyses, Challenges and Risks Facing Plan Sponsors, are jointly developed and sponsored by
|Copyright:||Copyright Business Wire 2012|
|Source:||Business Wire, Inc.|