The results of a survey of 401(k) participants by Fidelity Institutional Retirement Services Co. demonstrate that current efforts at investment education are falling short.
Only 8% of 401(k) participants surveyed are confident they will have enough money on which to retire, and yet 50% of this group had taken a loan from the 401(k) plan.
Employers and their 401(k) plan providers must rethink their efforts at educating plan participants. Group meetings, glossy brochures, videos and Internet sites are not doing an adequate job. At least, not yet.
Employers and vendors must review the education programs from top to bottom. Are the materials sufficiently clear? Are they boring? Do materials need to be tailored for different groups of employees? Do employees need more frequent contact with the concepts? Do they need more one-on-one counseling?
These questions lead to an even more important question: Who will pay for improvements in the educational programs?
No matter what the answer to that last question, it is clear improvements must be made, and soon.