SURVEY SAYS: Common Questions From Plan Participants

Retirement plan sponsors have reported in the past receiving common, repeated questions from plan participants—such as ‘How does the plan work?’ ‘How much should I save?’ and ‘What investment options should I choose?’

Many of these questions are answered in enrollment materials and meetings. But, I’m sure there are other common questions that get asked.

Last week, I asked NewsDash readers, “Do you get asked common, repeated questions from plan participants?” And I asked for help in identifying what these questions are.

Three-quarters of responding readers work in a plan sponsor role, while one-quarter are TPAs/recordkeepers/investment managers.

Ninety percent of respondents said they get common, repeated questions from plan participants, while 10% do not.

NEXT: Common, Repeated Questions

Asked to share some common, repeated questions asked by plan participants, responses included:

  • How much am I deferring?
  • How do I enroll in the plan? How do I take my money out of the plan? Can I roll my previous retirement account into this plan?
  • What is the best investment class in our plan? Where should invest my money?
  • Why is my (fill-in-blank) getting a lot more interest than me? My (fill-in-blank) says we should have "x" in our plan. Why don't we? What do you mean I can't take it out, my (fill-in-blank) says I can? Just saw my check, what's this deduction for "forks?" (this was the actual spelling). I don't need any.
  • How can I get my money out of the plan? How long will it take to get my money? It is MY money, how come I can't take it out whenever I want it? Why can't you just give me my distribution without paying taxes? [From a non-vested participant] What do you mean that I am not able to take my entire account balance?
  • Can I transfer my pension, prior 401(k), IRA, etc. into my current 401(k) account?
  • How much should I save and what investments should I select? Why can't you guarantee investment returns? It's my money, why can't I take it out whenever I want?
  • Why can't I have it -- it's my money?
  • How do I take out a loan? Can I rollover money from a previous employer?
  • How do I take out a loan? What is the difference between a traditional 401k and a Roth 401k?
  • How does the match/ER contribution work? What happens to my 401k loan(s) if/when I leave? How do I roll money over?
  • Which investment options are best for me? How much should I save each pay? Why did I not receive the full company match? Will social security still be available to supplement my retirement? How much do I need to retire comfortably and not make major changes to my lifestyle?
  • In a pre-tax situation, some employees want to know the net effect to their take-home pay if they increase their contribution.
  • How do I calculate how much to defer in order to maximize the company match and what I can save under IRS regulations?
  • Why can't I choose other investment funds? Why can't we have a brokerage window?
  • Where is my money? Why can't I take a distribution now while I'm still working, it's my money? Why can't I take a loan? My ( whoever) could from their plan ( plan doesn't allow loans).
  • What is the difference between a Roth and a Traditional 401k?
  • When I held enrollment meetings back in the day, I was always asked, What funds should I select?

In verbatim comments, several readers said participant questions were a good sign that participants are engaging in their plans and thinking about saving for retirement. Others said participants would know some of the answers if they paid attention to communications materials. One reader shared how a participant question led to a committee discussion and addition of a plan investment to the plan’s menu. Editor’s Choice goes to the participant who said: “I blame technology and fee compression… Today, everything is done through the web or email and no one is there to review basic concepts with participants.” 

A big thank you to all who participated in the survey!


Plan participants' questions? What is "plan participants' questions"?

In my office, I have a picture of Alfred E Newman emerging from a dumpster dive with the famous "what, me worry?" grin on his face next to a picture of an oceanfront 5-car garage filled with man-cars. It's a nice conversation starter.

I blame technology and fee compression. When I started in this industry (late 80s), I was an enroller. It was my job to go to companies and conduct group meetings to review all of the enrollment materials. I then went back a few days later and personally enrolled each person, and answered their questions. I then went back at each open date and did it all over again. Today, everything is done through the web or email and no one is there to review basic concepts with participants. Unfortunately, it is expensive to perform the personal service and no one wants to pay the true cost of personally educating participants today.

Not only do I not mind participant questions, I encourage them. It shows that they are at least trying to engage in the process!

You should also ask about bizarre questions from plan participants. We had a participant (a young Millennial passionate about social justice issues) asked to decline participation in the plan (we have an employer contribution not based on matching) because he thought it was immoral to invest in for-profit corporations. I had to tell him that it was not possible for us to exclude him from the plan and we had to make contributions to his account.

We're working on a Benefits FAQ ... but no matter what we do, we know we can't make people read it & they'll still prefer to call or email us instead!

Most retirement questions are reasonable and participants should be asking, albeit more are related to personal financial planning. The most unbelievable comment/question received is "Just tell me when you think I have enough money to retire. You know how much I have in my account and I trust your judgment and opinion!"

It is a good sign when they ask questions!

Our plan does not have a true-up feature and I usually have to explain why they'd want to spread their deferral out throughout the year instead of hitting the IRS max earlier. We recently changed our match formula and moved to a Safe Harbor plan, I find I have to reach out to those not deferring up to the company match to let them know how much they are missing out on.

Although the repeated requests for more investment options (gold, brokerage window, etc.) we did recently have a younger employee request the addition of a fund backed up with really good points. We didn't add the specific fund he requested but it created great dialogue amongst the committee and led to the addition of a similar fund that was more appropriate for the employer plan setting. Love stories like that!

All these questions are answered if participant would read the enrollment material, the SPD or even the one page summary handed out at enrollment and annually.

Any question is good because it means participants are taking their saving for retirement seriously.


NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Asset International or its affiliates.