NARPP Study Finds: Participants' Trust in Their 401(k) Provider is Holding Strong

NARPP’s 2019 Participant Trust and Engagement Study reveals that for the second year in a row, participants' level of trust in their plan provider is holding steady at 30 percent, an all-time high in this study. At the same time, generalized trust in financial institutions has dropped from 13 percent in 2018 to 11 percent in 2019.

Participants' level of trust in their employer is trending downward from 27 percent in 2017 to 25 percent in 2019.

Despite the relatively high level of trust in one’s own provider, the data show a significant downward trend in overall satisfaction with providers, which has seen a decline over the past six years, from 41 percent in 2014, down to 31 percent in 2019. 

The experience that the average participant is having with their retirement provider is coming up short in important ways: only 43 percent are satisfied with education services provided by their provider and participant engagement is decreasing across all channels of website usage, tools, etc.

Participants are feeling less confident in their ability to make good financial decisions —18 percent feel comfortable planning for retirement and 42 percent feel knowledgeable about finances. At the same time, financial stress is high at 49 percent, with Millennials feeling the most stress at 60 percent.

The data show that participants are interested in improving their personal finances — 33 percent have tried to reduce debt and make a budget.

Contributors of financial stress include:

·      Student debt: Roughly half of Millennials have student debt (median amount is $27,000)

·      Financial support for parents: 32 percent of Millennials have given financial support to a parent over the past year

·      Financial support for adult child: 33 percent of Boomers have given financial support to an adult child over the past year

The study profiles 16 leading retirement plan providers on trust and the factors that build trust. The most trusted providers are:

1.    Charles Schwab and Vanguard (tied)

2.    Nationwide

3.    T. Rowe Price

4.    Fidelity

5.    Alight, TIAA and Prudential (tied)

Other key findings include:

·      Trust in financial advisors: 16 percent.

·      Fee transparency is a key driver of trust — and 55 percent of participants don’t know how much they are paying in fees.

·      Gender engagement gap: There are significant differences in attitudes about financial matters and engagement between men and women. 

About the study

Now in its sixth year, this annual study takes an in-depth look at the factors that drive engagement with retirement savings including participant mindset, attitudes and needs. The findings from this body of work have established the link between trust, engagement and savings behavior.

The study surveyed a random national sample of more than 4,500 retirement plan participants.

For a copy of the report, contact NARPP at contact@NARPP.org.

About NARPP

NARPP is a San Francisco-based 501(c)(3) nonprofit organization dedicated to improving retirement savings outcomes for all working Americans. www.NARPP.org.

​Media Contact: 
Bill Cahan​
​415-215-4300

Source: NARPP (The National Association of Retirement Plan Participants)

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Categories: Retirement

Tags: 401k, retirement savings, trust