Printer Friendly

Employee retirement planning assistance lacking.

A William M. Mercer Inc. survey of 167 large and midsized companies found that only 44% offered employees retirement investment education programs for their 401(k) and other defined contribution plans, even though employees were required to act as their own pension managers for such plans. Education programs typically use group meetings, printed materials, individual counseling or videos to help employees understand investment choices and set funding goals.

Many of the companies that offered education programs, however, were not satisfied with them because they failed to motivate employees to save enough for retirement. Only 16% were fully satisfied with their education programs, 63% were somewhat satisfied and 21% were not very satisfied.

Close to three-quarters (72%) of respondents said nonmanagerial employees and 16% said managers did not understand how much they needed to save for retirement.

Michael J. Fitzpatrick, a partner of Ernst & Young, New York, agreed that plan participants generally were uninformed about investment options. He said, "One of the chief concerns of a plan administrator is to bring in an investment manager who can provide needed information without trying to sell a particular product."

Salvatore J. Armao, a partner of Biscotti, Grassi & Co., Valley Stream, New York, said another problem was that many younger employees had little desire to save for retirement. "Young parents or recently married couples are more concerned with saving for a house or car," he observed. "Retirement is the last thing on their minds."
COPYRIGHT 1993 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Oct 1, 1993
Words:240
Previous Article:Companies curb retiree health coverage.
Next Article:Reader survey results: how CPAs survived the tax season.
Topics:


Related Articles
Withholding and deposit practice guide issued.
Birth of an entitlement.
Emerging opportunities in employee benefits.
Managing your association's retirement plan.
Editor's Comment.
The single-participant 401(k): the who, what and why of this new benefit for small businesses.
Security gap: as employers reduce and eliminate retiree health benefits, individuals must take up more of the burden.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters