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Deloitte: Few 401(k) Participants Use Advice Programs

By Staff Writer

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NU Online News Service, Jan. 26, 2004, 3:15 p.m. EST – Employers may not be getting much value from 401(k) plan financial counseling programs.[@@]

When researchers from Deloitte & Touche L.L.P., New York, obtained paper and Web survey responses from 690 plan sponsors, they found that only 38% of the sponsors offer individual financial counseling or investment advice programs to any plan participants, and only 36% offer individual advice programs to all plan participants.

Three-quarters of the sponsors either get free advice services or pay for advice services themselves. But, at the employers that offer individual advice services, only 4% find that more than half of the plan participants use the services. At 79% of the employers, fewer than 25% of the participants use the services.

Employers have a hard time measuring the effectiveness of the advice programs, because 71% of the employers that offer advice programs have no information about whether participants act on the advice, Deloitte reports.