71% of survey respondents failed 401k IQ in the workplace test
- Most employees might think they understand their employer’s 401k plan, but in a recent test, Fisher's 401(k) IQ in the Workplace Quiz, 71% failed. Fisher Investments released the results, which showed a gap between what the respondents said they knew about 401ks and their actual knowledge of the plans
- Most of the respondents, 88%, understood the matching-fund concept with 401ks, but only 24% could explain a mutual fund and only 40% knew how much of their pay they would need to save to live comfortably in retirement.
- The test results showed that most of the respondents, four out of five, preferred a company that offers a 401k plan. But most, 66%, said they were uncomfortable about choosing the right investment options. Fisher says one in four of the respondents didn’t pick their 401k assets or couldn’t remember how they were chosen.
The disappointing test results prove that employees want and need more education about their employer-sponsored retirement investment plans. HR can invite financial experts to the workplace for sessions on 401k plans, including how to choose assets, how to know if retirement goals are being met and other important information.
New technology has emerged in the field to assist with these issues, though most 401k programs are still catching up.