While virtually all companies say that they want to help employees properly prepare for retirement, a new Wells Fargo survey shows that only 11 percent compare their employees’ retirement income with expected needs; 51 percent don’t provide retirement income estimates at all. Just half of all participating companies reported to having not measured the individual progress. Contrary to this dire data, 63 percent of companies reported that educating employees about overall retirement needs or ways to increase savings were a primary goal for plan management in 2012.
“Employers care about their employees’ ability to retire, but they are not taking enough steps to proactively assess if their employees have enough to retire,” said Joe Ready, co director of Wells Fargo Institutional Retirement and Trust, “Companies measure results all the time; they should treat this investment as they would any other corporate initiative and ask themselves if all the hard work and financial support is translating to better retirement readiness outcomes.”
Regarding the new fee disclosure requirement, 48 percent of companies sponsoring 401(k) plans reported that disclosure will have only a small impact on participants while 49 percent say that the disclosures will confuse plan participants. A mere 5 percent of respondents indicated that they thought the requirement will lead to better investment choices made by employees.
“We fully support fee transparency and have a strong history of doing so,” said Laurie Nordquist, co-director of Wells Fargo Institutional Retirement and Trust. “We want to make sure that when participants are looking at fees, they understand what they are seeing so they can make informed decisions. At Wells Fargo, we will take the required fee disclosures further and encourage the participant to take the next best step: whether that’s enrolling in the plan, increasing their contribution, or changing their investment mix.”