A Mercer news release about the surveyof 235 companies in 13 countriessaid sixin 10 respondents cited securing “employee understanding” of their plan and “effective communication” as key hurdles.
Not only that, Mercer found, while over 80% of DC plans consider Web sites and personalized communication important tools, just over half provide member Web pages and the vast majority (80%) say they make due with generic literature such as newsletters and brochures.
“There is a clear contrast between what employers want for their schemes and what is being achieved,” declared Tim Burggraaf, a principal in Mercer’s retirement business, in the news release. “Putting resources into improving members’ understanding is paramount in order to get them to value the scheme.”
Mercer said the need for education is reinforced by the size of the investment option menu in many plans. Members can choose from an average of 15 investment options, with some plans offering a choice of over 100.
Nearly 75% of the participating plans offer a default investment option, which as many as 70% of members choose.
Fewer than half of the plans surveyed (43%) measure their success factors and as few as 17% document them, Mercer found. More than two-thirds of plans have no formal objectives or goals and only 26% say a written policy exists.
The survey covered 41,000 participants in 18 industry sectors and looked at plans with combined assets of over € 520m ($816.7 million), the announcement said.
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