Most Workers Do Not Review Retirement Plan Disclosures

Roughly two-thirds of workers with retirement plans surveyed in 2016 had not read any investment fee disclosures in the previous year, according to The Pew Charitable Trusts, which conducted a nationally representative online survey of nearly 3,000 private sector workers. Even among those who said they were very familiar with their fees, 33% hadn’t read any fee disclosures in the past year.
Key findings of the survey include the fact that, while nearly seven in ten respondents with retirement plans said they were at least somewhat familiar with their plan’s fees, 31% percent were not at all familiar with the fees. Of the third who had read a fee disclosure, not all found the information understandable. Familiarity with these fees is important, says Pew, because most workers with retirement plans have defined contribution plans, such as 401(k)s or individual retirement accounts (IRAs), in which they shoulder all the risks of investment loss. Only seven out of ten of those who read the disclosures reported that they understood the information. In total, only 25% of all respondents said they had both read and understood a disclosure about retirement account fees.
Demographics. Hispanics, women, younger workers, respondents with lower levels of education, and low-income workers were among the least likely to be familiar with the fees in their plans, according to research findings. Workers who had engaged in retirement planning at some point were more likely than those who had not to be familiar with their retirement plan fees.
SOURCE: Wolters Kluwer