Plan sponsors have a responsibility to participants to make retirement plan offerings cost-effective, accessible, easy to understand, and risk managed. Their clearest goal is simple: help to ensure participants are prepared for retirement. Unfortunately, that has proven easier said than done. An alarming body of research by the Employee Benefit Research Institute suggests that many employees are not likely to arrive at retirement age in a secure financial position. Similarly, well over half of all participants in a recent survey failed a basic 401(k) quiz, and an almost equal number reported lack of confidence in their ability to choose investments. These figures are symptoms of a larger issue: financial ignorance. Plan participants often lack a solid understanding of what drives the success of their retirement savings, and increasingly, their unawareness is leaving them unprepared to leave work. Implementing plan participant education is key.
