Believe it or not, a survey released Thursday by AARP found that the majority of respondents prefer to read retirement plan information on paper rather than with electronic media.
What’s more, AARP didn’t come to this conclusion by ignoring iPad-owning and e-reading millenials. The organization surveyed over 1,000 adults over 25 who are current or former participants in a 401(k) or pension plan.
While 70% of respondents go online at least once a day, three-quarters of respondents said they would choose paper disclosures if they could only choose one method.
The survey found 27% of people receive disclosure documents both on paper and electronically.
Among participants who have an email address, 70% said they were more likely to read paper versions of plan information. Seventy-three percent said they were more likely to save paper versions than electronic versions.
What isn’t surprising about the survey results is that when they are broken out into age groups, younger respondents were more likely to prefer electronic delivery. The survey found the 25-49-year-old age group was also more likely to receive both paper and electronic disclosures.
When specifically asked which delivery method should be the default–paper or electronic–74% of all age groups said paper disclosures should be the default, but individuals should be able to request email delivery if they prefer. Just 20%–and only 27% of younger respondents–said electronic delivery should be the default.
At ASPPA’s 401(k) Summit in March, Executive Director Brian Graff and Michael Davis, then deputy assistant secretary of labor for the Employee Benefits Security Administration, debated which format was more beneficial. “The department has to balance between a lot of different constituencies,” Davis said then, adding that people who were closer to retirement, and therefore needed disclosures more, tended to be “less electronically literate.”
Judy Miller, director of retirement policy for ASPPA, pointed out that although respondents appear to prefer paper disclosure documents, they weren’t about how the cost of delivering paper documents would affect their decision.
“They should’ve been asked if they’re willing to pay more for paper delivery,” Miller said. “Cost went up significantly with fee disclosure rules. I’ve heard substantial amounts from different companies. It’s not hundreds, but it is meaningful.”
What’s more important than cost, though, is how participants engage with the information they receive and if they’re reading it at all, Miller said.
“I was pleased to see close to half of people who receive documents electronically read them,” she said. “There was no similar question for people who get paper documents.” The survey found 48% of people who receive electronic documents read them on a computer, tablet or smartphone.
Companies are doing creative things with how they electronically deliver retirement plan information to their participants, Miller said. “When they also have to invest substantial resources into paper delivery, it takes away from what they can do.”
Ultimately, regardless of the delivery method, the goal is for participants to read the disclosures. “If we’re going to do it, it’d be nice if people read it.”