Even though they maintain that fees are an important consideration in their investment decisions, most 401(k) plan participants say they lack basic knowledge concerning them.
Among 401(k) plan participants age 25+ surveyed by AARP...
- 79 percent of those who make decisions about their investments consider fees an important consideration in making investment decisions
- 83 percent admit that they actually do not know how much they pay in fees and expenses associated with their own plans
- 54 percent say they do not feel knowledgeable about the impact that fees can have on their retirement savings
Despite their lack of knowledge about fees, many respondents realize they can have a significant impact on their returns, and express a desire to have a better understanding of the long-term impact of fees. For 77 percent of those surveyed, paper materials are the most widely desired vehicle for receiving fee-related information, with 30 percent preferring the Internet.
When asked who should be most responsible for ensuring that participants understand fees charged by plans, they replied...
- employers that sponsor plans (36%)
- financial services companies that administer them (32%)
- 401(k) participants themselves (28%)
This survey of 1,584 401(k) plan participants ages 25 and older was conducted for AARP by Knowledge Networks using its nationally representative online panel. The survey was fielded from June 8 to June 24, 2007. For further information about the study, please contact the report's author, S. Kathi Brown, at 202-434-6296. (41 pages)