The Deloitte “Annual 401(k) Survey of Retirement Readiness” builds on several years of study for Deloitte’s research group. The details of their summary finding are telling:
Only 15% of surveyed employers believe most employees are or will be prepared for retirement, leaving an astounding 85% that believe some or very few will be prepared for retirement (Exhibit 7.7).Where to begin?
A mere 25% of surveyed plan sponsors offer managed accounts (Exhibit 7.8).
For those that do not offer this service, potential fiduciary responsibility was listed as the top reason (60%) for not offering managed accounts (Exhibit 7.10).
Top line, this seems to confirm our poll results, where the holders of 401(k) retirement plans aren’t convinced about their ability to retire on time, or as they’d previously planned. In this case, employers don’t seem convinced that their employees will be prepared for retirement. We would have liked to have seen a break-out on this question, where we learned the views of those 25% with “managed accounts” (which we assume to be defined benefit plans). Did those employers feel their employees would be prepared? We will work to find out.
Interestingly, managed accounts are seen by companies to be prohibitive because of their liabilities for ‘fiduciary responsibility.’ This is another topic we will have to take up in the future. – Max Patterson