Survey: More Companies Offering Post-Retirement Education

October 9, 2002 ( - A significantly larger number of defined contribution retirement plans are offering investment education to their retirees, a new survey found.

According to the Eighth Annual Defined Contribution Plan Survey from  CRA RogersCasey and the Institute of Management and Administration (IOMA), 60% of DC plans offer post-retirement education. That’s up from 43% in 2000 and 35% in 1999.

The larger the plan, the more likely it will reach out to its retirees, the study found. Some 67% of plans with assets of over $500 million now provide post-retirement education compared with 58% of plans with $25 million or less in assets.

Whether it’s aimed at current employees or retirees, it’s clear from the study that providing investment education and providing the data and tools to help employees make asset allocation decisions is high on most DC plan sponsors’ to-do lists.

Some 48% of respondents placed “employee education and communications” at the head of their list of priorities for the next three years followed by 44% who cited “investment advice.”

Plan sponsors were mixed, however, when judging how effective their current education programs were. While 98% reported having a communications program associated with their defined contribution plan, only 14% rated the program “excellent” and 48%   “good.”

In general, larger plans and plans managed by a firm’s Human Resource’s Department had higher ratings than smaller plans and those managed by the Finance Department, the survey found.

Investment Advice

Although lagging behind straightforward information, actual investment counseling is also a growing service being increasingly provided by plan administrators.

Currently, only 25% of the respondents provide investment advice for employees while another 13% are planning to install such a program this year, the survey found.

Typically, plan sponsors now look to their recordkeeper for advice services.   Some 36% of plans use the recordkeeper for advice and another 14% use a recordkeeper’s alliance partner.

The Internet, the survey also showed, continues to be a very significant channel for delivering both the education and advice services made available by plan sponsors.   Some 60% of plans now use the Internet for their investment education programs, including the vast majority (79%) of those who gave their communications effort an “excellent” rating.

Nearly half (42%) of those plans with an excellent rating also use the Internet for delivering investment advice to employees.

The latest survey involved 263 retirement plans with total assets of over $94 billion and close to two million participants.