CHICAGO, IL -- (Marketwired) -- 07/17/13 --
•Client loyalty: BMO Retirement Services continues to earn "Star Performer" designation •Plan sponsors put a premium on adding solutions that are easy to understand and easy to implement •Eighty percent of plan sponsors report mandated fee disclosure changes have had little to no impact on how participants engage with their 401(k) plan
According to a client survey of 416 plan sponsors conducted by BMO Retirement Services, new fee disclosure regulations implemented last year have had a negligible effect on workers participating in employee-sponsored retirement plans.
According to the survey released today, 80 percent of employers reported that the new rules mandating full disclosure of retirement plan fees and expenses have had little or no impact on their plan participants. This disclosure was introduced by the Department of Labor's Employee Benefits Security Administration in early 2012.
Most notably, plan sponsors believe the added regulations -- designed to educate American workers and help them more prudently contribute to their 401(k) retirement plans -- did not change participant behavior or their perception of their retirement savings benefit. In fact, only one percent of plan sponsors participating in the survey reported seeing positive or negative changes in participant behavior. Similarly, just one percent of respondents felt an increase in ill will toward either themselves or the plan's recordkeeper.
Curiously, most plan sponsors believe that this increased disclosure has not added to participant confusion. According to the survey, only 15 percent of plan sponsors see this disclosure as confusing to their participants. In contrast, 46 percent expressed this concern shortly after last year's regulatory changes took effect.
When asked when they expect older plan participants to retire, more than one-third (36 percent) of the plan sponsors surveyed believe that the Baby Boomers enrolled in their company retirement plans will work past the age of 65. Interestingly, 41 percent expect this will have a positive impact on their companies, compared to only four percent who felt the impact would be negative.
"People are living longer than they did decades ago so it is not surprising that such a large number of our plan sponsors believe that their employees will be working well into their 60s," said Matt Smith, Managing Director, BMO Retirement Services. "This bodes well for employers who wish to hold on to employees with valuable knowledge and experience. It also bodes well for workers who want to work longer. Working keeps people vibrant and young, so if you're happy and healthy and enjoy your job, why retire?"
Plan Sponsors Crave Straightforward Solutions
The survey also identified key attributes that plan sponsors look for when considering adding a retirement solution to their company's defined contribution plan:
•Three-quarters (74 percent) of plan sponsors want solutions that are easy for their plan participants to understand. •More than one-quarter (26 percent) want solutions that are not too complex to manage as a plan sponsor.
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