August 28, 2012 (PLANSPONSOR.com) - One in five defined contribution (DC) participants surveyed by LIMRA said they rarely or never read retirement plan disclosures.
The rest claimed to read disclosures at least some of the time, but the majority reported they are only skimming them and/or trying to see if they reveal something “important.”
The most common reasons plan participants do not read disclosures are that they are too long, and that they are too technical/complicated and hard to understand. Forty percent said that they did not read disclosures because they would not change anything, anyway.
Reaction to fee disclosures could be muted in part because participants are not sure what to do with the information.One in three plan participants reported they did not know what they would do when asked about their reaction to discovering they pay higher than average fees.Nearly one-quarter (24%) said they would move their current assets into funds with lower fees and one in five (21%) said they would speak to their employer about the fees they pay. Younger plan participants (ages 18 to 35) are more likely to report reading disclosures; this group is also more likely to reach out to their employer for information about their retirement account than older participants.