Alice retires to wonderland.

* RetireNet, video, 1999, 20 min., VideoMedia (888-621-7773, fax [phone], www.videomedia.net), $495. Other material: none.

Large numbers of working people pass up the opportunity to enroll company-sponsored retirement plans. In RetireNet Alice runs through her own excuses: can't afford it and it can wait. She needs some facts to cut through her excuses. She jeopardizes her retirement lifestyle if she doesn't save to achieve 70-80% of her pre-retirement annual earnings. Government programs offer a false sense of security because we can't bet on the same level of benefits 30 years down the road.

RetireNet is about building a personal safety net through investing in an employer-sponsored retirement plan. The target is definitely first-time investors with a thing for fairy tales. The single, sulky star, 26-year-old Alice, finds herself dropped into retirement wonderland, a checkered floor backdrop complete with pillars topped by piggy banks. Alice's host is a madhatter dressed in dark clothes. He spars with Alice over participating in a company-sponsored plan.

He does well to convince her that she's responsible for paving the road to retirement. If Alice, making $30,000 per year, can carve out $125 per month for 30 years, she can snowball her savings to $153,000. In addition, she can avoid paying $35 per month in taxes. This is based on a 28% taxable income and a modest rate of return. If she's lucky, her employer may match her contribution. For Alice, the trick is to create the winning combination of equity (owning a piece of an organization) and fixed income (loaning your hard-won cash) and changing the mix of the two as her earning years diminish.

If Alice gambles with potentially high-return equities, she deals with high risk and potentially large peaks and valleys, usually a safe bet for the younger crowd. If she places her money under the pillow, inflation may eat her nestegg. Her middle ground is bonds and treasury bills. If this is all too confusing to Alice (not hard to imagine), she's referred to magazines for research and to a financial advisor.

It's annoying that Alice and the Hatter can't get along. I was frustrated at the fourth or fifth one-line zinger. The video could use a change of scene; a piggy bank and a single bar chart provide the only relief from the bickering. I needed extra strength to sit through a second showing. The graphics, setting, and wardrobe are circa 1960. The actors reach for credibility, accents, and lines throughout. Having a woman in the role of annoying airhead being tutored by a male expert can raise questions about the productions gender assumptions. The choice might be perfectly innocent; still, women in the audience could take offense.

This is a great topic, a huge issue for working people, and deserves better treatment. The audience may better understand the concepts of retirement investing and feel they're missing something. However, I wasn't running to the phone to raise my voluntary contribution.

The wonderland duo doesn't venture into everything they should, including penalties for cashing in retirement savings or investments in their employer's common shares. Also we don't hear about comparisons to saving through investments such as shares of other companies or real estate assets. They're alternatives for loading up a retirement plan. What about when we reach retirement? We don't hear about annuity options, limits, or taxation upon withdrawal. The single example and calculation won't motivate the growing number of employee investors.

Recommendation

Training on financial planning for retirement probably should be mandatory, like OSHA requirements for on-the-job safety; it's that important to the long-term welfare of employees. This video isn't the solution. I recommend searching for an introductory video from an investment organization to encourage enrollment and follow that up with regular on-site presentations and question-answer periods.

Paul Pierroz ([e-mail]) is Human Resources Manager with Husky Injection Molding Systems Ltd. in Bolton, Ontario, Canada.