Participants Looking for Help, Not Bail Out: Survey

April 15, 2002 ( - While participants seem increasingly willing to take responsibility for their retirement savings, employers will not be able to adopt a one-size-fits-all approach to help participants, according to a new survey.

A recent survey sponsored by Northern Trust Retirement Consulting found that more than a third of 450 randomly selected, pre-qualified 401(k) plan participants said they do not know how to invest or do not know anything about the stock market. 

Yet this participant sampling appeared to comprise reasonably active participants.  Over half (58%) periodically check the balances of their accounts in addition to reading statements, and 93% either made initial fund allocation decisions and/or continually make changes to their accounts.

Despite the widespread availability and access to 401(k) information on the Internet, less than a third (30%) said they were ‘very comfortable’ with conducting online transactions.

Employer Expectations

Nearly all (89%) of employees say their employers are responsible for giving employees the ability to invest their 401(k) however they want to.  And while nearly three-fourths (72%) also say their employer is responsible for providing financial advice that can help employees reach their retirement goals, just 37% expect employers to monitor employee accounts to insure that good decisions are made.

However, nearly 1 in 5 say employers are responsible to make up the difference in value of employee 401(k) accounts if there is a prolonged downturn in the market.

Self Directions

Fewer than one in four companies currently offer self-directed brokerage accounts (SDBA) to their employees – but participants don’t seem to be pining for the option.  Two-thirds of participants who don’t have an SDBA don’t want it, even if offered by their employers. 

Among 401(k) plan holders who do have an SDBA, 40% do not use it at all – and only 9% of those who do use ‘use it a lot,’ according to the survey.

Private Security

More than two-thirds (67%) support the notion of privatizing social security, but only 56% ‘agree strongly’ that they would like to do their own investing.  A comparable 56% would invest those funds in their 401(k), given the option.

The survey was conducted by the Melior Group with a listed, random sample of consumers, targeted for ages 18 – 65 between February 21 and March 6.  All 450 respondents were screened to ensure that they are enrolled in a 401(k) plan offered by their current employer.