(Charlotte, NC) Investment education provider ICC Plan Solutions just completed a survey of Plan Sponsors for one of their TPA clients and only 11.9% said they were satisfied with their current education programs. At the same time, 73.8% said their participants need help with basic investing knowledge. Surprisingly, only 5% claimed to be concerned with the cost to implement a comprehensive education program to their participants.
"Our TPA client has over 300 Plans and wanted input from them to create a more effective education/communication program;" explains Danny Streiff, co-founder for ICC Plan Solutions. "We sent an e-mail to their Plans requesting they go on-line to complete a survey. Almost 40% of the Plans responded to the survey;" Danny elaborated.
35% of the respondents claim they receive a lot of questions whenever 401K statements are issued. Only 33% believe their participants could tell them what investments they currently have in their 401K and 73.8% feel strongly that their participants need help with basic investing knowledge.
When asked what they considered the most important factors for an education/communication program, the top five responses were: (more than one answer was permitted) 1) 90.5% - on-going updates & participant support, 2) 85.7% - explain how to establish retirement goals, 3) 83.3% - providing basic knowledge of investing, 4) 82% - Explaining specific investments available in the plan, 5) 81% - on-going updates and participant support.
Majority of participants don't know what they are contributing.
Many employee's who invest in their company sponsored 401K plan don't have a good handle on the answers to basic investment questions, let alone a grasp on how their retirement plan performed in 2003.
A recent survey by ICC Plan Solutions uncovered that the majority of 401K participants don't even know how much they are putting into their retirement savings plans.
Of over 1,120 respondents to their on-line survey, an amazing 51% said they did not know how much they were contributing from their paycheck into their 401K plan. The question posed was; "What percentage of your paycheck do you currently defer into your retirement savings?" 51% admitted they had no idea. 27% of the participants who responded said they defer 4% or less. 21% claim they contribute between 5% and 9% and 1% believe they contribute 10% or more to their retirement plan.
The survey was conducted at www.icceducation.com, the main portal for âEssential Investment Strategies', the retirement plan investment education system offered by ICC Plan Solutions.
"From our experience, we suspected the percentage of those who did not know would be high;" says Doug Hall, President at ICC Plan Solutions. "We never believed, however, that over 50% would admit to having no clue what they contribute out of their paycheck;" Doug elaborated.
According to the Profit Sharing Council of America, deferrals averaged 5.2% in 2002. This is according to the PSCA's 46th Annual Survey of Profit Sharing and 401(k) Plans reports.