An employee's decision to participate in a 401(k) plan is most influenced by co-workers, family, friends and financial advisers, found a new survey by Fidelity Institutional Retirement Services Co., Boston.
The design of 401(k) plans is the second most important influencing factor in plan participation, followed by a participant's own savings inclinations.
The survey found that among the 600 401(k) participants interviewed, nearly 91% said they consult employer-written materials once they decide to enroll in the plan. Of those enrolled in a 401(k) plan, 42% said they aimed for a balanced investment mix for their accounts, 29% wanted to preserve capital and 26% wanted to maximize asset growth.
The study also examined reasons for not participating in a 401(k) plan. The most commonly cited reason, given by 36% of respondents, for not enrolling in a plan was limited financial resources, followed by outside influences from friends and family, 31%. Confusion about the plan also kept 22% from enrolling.
Attendance at training seminars seems to be a strong factor in how participants invest their assets, the study found. Lower levels of diversification of account assets were associated with lower attendance at employee meetings. Without explanation by a trainer, employees also found plan materials to be of less value.