Using easy-to-understand terminology, supported by animation
and infographics, this explanation will cover J.P. Morgan’s SmartRetirement
series of target-date funds. It will also be available to all SmartRetirement
clients, regardless of the recordkeeper servicing their plan.
“Research has shown that while defined contribution plan
participants want access to target-date funds for retirement savings, they do
not understand some of the most basic components of how target-date funds
work,” said Catherine Peterson, director of Retirement Insights at J.P. Morgan
Asset Management. “Given the growing importance of target-date funds in plans,
we developed this program to specifically address identified participant
Peterson pointed to industry studies, which continue to show
that many participants misunderstand key
ideas such as what the date in the fund name actually means, the fact that the
funds are already fully diversified and that target-date funds do not provide
guaranteed income in retirement.
While many firms want to provide more information to
participants, J.P. Morgan’s recent research found that 75% of participants
don’t take the time to read all of the investment information currently
provided to them. Also, 44% said they are already getting more information than
they can absorb.