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WINDSOR, Conn., Aug 27, 2012- Two-thirds of Americans with defined contribution (DC) plans or IRAs admit to spending less than five minutes examining their retirement plan disclosures — one in five say they rarely or never read the disclosure paperwork at all.

The study found younger plan participants (age 18-35) are more likely to report reading their disclosures and more likely to reach out to their employer for information about their retirement account than older participants.

"With the implementation of the Department of Labor's new fee disclosure rule, LIMRA wanted to gauge participant sentiment throughout the process," said Alison Salka, corporate vice president, LIMRA Retirement Research. "Not surprising, almost 9 out of 10 participants either did not know the fees they paid or did not think they paid any fees for their employer-sponsored retirement plans. As participants are provided more detailed information about their retirement plans' structure and fees, we are interested to see how they respond. This survey is part of a series to track consumer knowledge and understanding of the information and the subsequent actions (if any) they take."

Only 12 percent of plan participants said they could estimate the amount of fees and expenses they paid on their retirement plan account. Three-quarters of these participants said they felt the fees and expenses were reasonable. Interestingly, 56 percent of those who estimated the fees and expenses thought their fees were more than two percent, which is more than double the all-in median fee for a defined contribution plan participant (based on plans included in a 2011 Investment Company Institute study).

LIMRA also asked participants what action they would take if they found out their fees and expenses were higher than average (Chart). One-quarter said they would move their assets into funds with lower fees, one-fifth said they would talk to their employer about trying to lower the fees but nearly half said they would take no action or they didn't know what they would do. While men are slightly more likely than women to say they would take no action than women (19 percent vs. 13 percent), women are more likely to not to know how they would react (36 percent vs. 26 percent).

"This study underscores consumers' lack of understanding about how their retirement plans are administered," noted Salka. "This offers an opportunity for plan sponsors and providers to educate participants on the value and benefits of the plan."

With more information becoming available to the more than 80 million defined contribution participants in the U.S., LIMRA will be monitoring and measuring how plan participants react and the ultimate impact on the DC system.

LIMRA Contact:

Catherine Theroux, (860) 285-7787,


LIMRA, a worldwide research, consulting and professional development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at

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