SURVEY SAYS: Changes in Retirement Plan Participant Behaviors

PLANSPONSOR NEWSDash readers offer their opinions about whether retirement plan participants will pay more attention to electronic disclosures and whether more of them will dip into their retirement accounts.

Most retirement plan sponsors and providers would agree that participants generally do not read disclosures sent to them. I asked NEWSDash readers, “With the new Department of Labor (DOL) rule allowing electronic delivery of plan disclosures, do you think more participants will pay attention to them?”

Also, plan sponsors and providers have reported that the number of participants who have dipped into their retirement savings accounts for financial help is not as large as expected. I asked NEWSDash readers, “With Congress stalled on legislation that would provide greater unemployment benefits and another stimulus check, do you think that will change?”

Nearly six in 10 (58.8%) of responding readers work in a plan sponsor role; 14.7% are recordkeepers/TPAs/investment consultants; 17.6% are advisers/consultants; 5.9% are attorneys; and 2.9% are CPAs.

The majority of respondents do not think more participants will pay attention to disclosures delivered electronically, while 8.8% said they think they will and 5.9% are unsure.

With Congress stalled on legislation that would provide greater unemployment benefits and another stimulus check, 55.9% said they think more participants will request loans or distributions from retirement accounts to help them financially. More than one-quarter (26.5%) said they don’t think more participants will dip into their retirement accounts, and 17.6% are unsure.

Most of the readers who chose to enter a comment weighed in on electronic disclosures to participants. Some suggested it is not the delivery method that leads participants to ignore them but the way they are written. Among those who did comment about more participants requesting loans or distributions from their retirement accounts, one suggested any increase would be due to voluntary separations and early retirements not a reduction in unemployment benefits. Another contended that many of the people whose employment has been affected by the coronavirus are young in entry-level or part-time jobs and do not have retirement accounts. There is no Editor’s Choice this week.

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


I do not believe the format in which the disclosure is sent will make a difference. Disclosures are written mostly in arcane, difficult to understand, and verbose language that seems to be designed to prevent the average person from reading and understanding them. We should be able to do better no matter how they are delivered.

I think less participants will read the electronic notices. It is easier to hit delete on an email than to toss out a paper copy.

I think more participants will pay attention to plan disclosures as a result of electronic delivery, however I think the increase will only be slight.

Most plan participants are lazy investors.

I believe it’s much to do about nothing. I’m not changing how we distribute disclosures due to the confusion of the reg.

I’m not sure there should be another stimulus check. It’s time to get back to work.

Some plan participants don’t even open or read emails we send with the subject line: Please read – Important Information About Your…….. So, I don’t think they’ll pay more attention to electronic disclosures.

Electronic disclosures will just be another email that participants will ignore or delete. Most of them just throw away the disclosures now.

I think we’ll see a high click-through rate on the electronic delivery, however people won’t read them due to their legalese and density. I think there will be a longer tail on loans drawn on retirement accounts due to the trend of “voluntary separation” aka “early retirement,” less so the stimulus check.

The DOL electronic disclosures rule will help to reduce the cost of sending out documents to participants (paper/USPS, etc.) that they don’t even read. I do wonder how we’ll be able to keep in touch with our participants though, as mailing the plan disclosures was one way to do so.

I think that the paper disclosures are much more likely to be read as they are physically present. E-notices will likely just be one more easily ignored item in an overloaded email inbox. Isn’t that ’email jail?’ 🙂

I think that electronic disclosure will save a lot of paper, which is good, since I truly believe that less than half of the plan participants who receive this stuff understand it. It’s written by lawyers, and we all know just how we love to obfuscate and then call it clarification.

I love the electronic disclosure revisions! Will save time and money! Although the unemployment rate is high, much of it is in entry level, part-time, service jobs. Many of the workers in these positions are young and do not have retirement accounts, so the number of COVID related withdrawals may not be as high as some think.

Disclosures may be read more if they are in the body of the email with simple wording. I am worried about the effect of the expiration of enhanced unemployment benefits and no stimulus. Americans who are struggling will need to go somewhere, and since most don’t have adequate savings outside of their retirement plan, that may be the only option. We need real leadership in the government, which is sorely lacking right now.

Unemployed will request distributions.

Electronic delivery of information is efficient for the sender. Electronic inboxes are already overstuffed so I do not believe that the electronic delivery of plan disclosures will be more effective to increase participant attention.

Could more people request funds from their retirement plan? Yes! However, I think it is unrelated to the need for greater unemployment benefits. There is only a slight overlap between these two groups of people.

I’m supportive of electronic disclosures as it takes cost and burden off the plan sponsor but I don’t see that increasing the number of participants who actually read the notices.

Electronic disclosures actually make it easier for people to read: you can search for key words that you think are important and read those sections. When the co. sends you a 26 page disclosure, it goes into the trash. And I think that if participants were going to dip into their retirement accounts during the pandemic, they would have done it by now.


NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Institutional Shareholder Services (ISS) or its affiliates.