One in three (34 percent) Americans say they have little or no understanding of their employer-provided retirement savings plan, while three in four (74 percent) say they have less than a complete understanding, according to research from The Hartford Financial Services Group, a retirement plan services provider. Employees indicated they had a better understanding of other benefits provided through their employer, such as medical coverage and life insurance.
"With millions of Americans entering or approaching retirement within the next five to 10 years, it's critical that we understand how to make the most of our retirement benefits," said Jamie Ohl, senior vice president of The Hartford's retirement plans group. The survey, she noted, found differences in understanding by gender and age:
• More men (75 percent) reported they needed little direction to understand their retirement benefits than women (56 percent).
• Generation X (ages 30-44) reported having the best understanding of their retirement plan, even higher than Baby Boomers (ages 45-65), who are closer to retirement.
When employees seek advice to understand their retirement savings benefits better, the survey showed, they most often turn for guidance to:
• Their employer (19 percent).
• Financial advisors (15 percent).
• Spouses (13 percent).
• Immediate family (12 percent).
• The Internet (9 percent).
Age and gender also influenced to whom plan participants turned for advice. Women trusted immediate family members and spouses more than men did, while men were more likely than women to gravitate to the Internet as a source of information. Baby Boomers and Gen Xers ranked employers as their top influencer, while Gen Yers (ages 18-29)—the youngest group polled—were most likely to be influenced by their immediate family.
Ohl encouraged employers to take note of the influence that they carry when it comes to employees making decisions about retirement and to provide the right tools to help educate their employees, such as:
• Creating simple educational materials that can be delivered in person, in print and online.
• Putting retirement savings objectives in context with each employee's overall financial objectives.
"When we asked people what would most help them understand their employer-provided benefits, the top two answers were providing simple materials (36 percent) and having access to one-on-one support (22 percent)," Ohl said.
The survey, conducted in April 2009, polled 1,019 U.S. adults age 18-64.
Stephen Miller is an online editor/manager for SHRM.
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