401(k) participants using in-plan advice have more positive retirement outlook: Mercer

Employees who say they use advisory services offered to them in their 401(k) plans have a distinctly more positive outlook about their future retirement versus those who do not, according to an analysis of data from the recent Mercer Workplace Survey. The survey represents a national cross-section of active 401(k) participants, defined as those currently contributing to a 401(k) plan irrespective of balance or having a 401(k) balance of $1,000 or more with their current employer whether or not they are currently contributing. Online interviews were completed with 1,656 participants between June 6 and June 21, 2012.

Nearly one-fifth (18%) of survey respondents say they engage with an online or in-person advisory service in their 401(k) plan. Although a relatively small percentage of the base, Mercer found that these participants are much more likely to feel that they will have enough money for retirement, can live as well or better than when working, and will not have to delay retirement.

“This is great news for plan sponsors who offer advisory services in their 401(k) plan, as there is a clear correlation between positive retirement sentiment and engagement with these services,” said Dave Tolve, Administration Product Leader for Mercer. “Yet, with relatively low usage among participants—especially when you start to look at the demographics—there is still work to be done,” he added.

The Mercer survey also revealed that awareness and availability of in-plan investment advice is high—79% of participants said that their plan offers some type of advice (online, in-person/telephonic, or both) up from 72% in 2011.

Source: Mercer news release, March 28, 2013.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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