Cecily O'Connor
RedwoodAge.com 

Investment information aimed at 401(k) participants is readily available, but because it's still so dense most investors lack time and interest to read it, a new study found.

(RA Photo)

About two-thirds of participants admit they don't read what they are given - despite the scrutiny and urgency on fee disclosure and financial information, according to J.P. Morgan Retirement Plan Services, which surveyed 1,077 employees participating in 401(k)s. 

One measure, H.R. 2989, was approved by the House Education and Labor Committee earlier this summer. It would require service providers to divulge all fees levied against a participant’s account, with those charges recorded in four categories: administrative, transaction, investment management and other fees. The bill has seen little action since that house panel OK in late June, however.

In the meantime, the disconnect among employees seeking control of their assets - and actually making time for informed decisions - highlights the need for further changes that will resonate with individual investors.

"It is interesting that participants want to be in control of their retirement planning decisions, despite the fact that they admittedly lack the time, interest and confidence in investing to make those decisions," said Pamela Popp, chief executive officer of J.P. Morgan Retirement Plan Services. which markets plans to companies.  "It is important for the
industry to understand this disconnect and instead of trying to change it, to meet participants on their own terms with solutions that help them make the right informed decisions."

Consumer Protection
The call for increased financial transparency extends outside the retirement savings world, too. Legislation to establish President Barack Obama's proposed Consumer Financial Protection Agency — which would provide new rules surrounding loans and credit - was green-lighted by a house committee recently. However, when all is said and done, the scope of the agency will likely be reduced from the president's original concept.

Even with the need for increased consumer and investor protections, three out of four 401(k) participants said they have confidence in their own financial decision-making, J.P. Morgan found. That's twice the level of trust what they have in their employer and five times that of government.

Overall, the importance of 401(k) investing is not lost on most participants, with saving for retirement a still priority, ahead of
paying bills.