Many workers find them boring, difficult, insufficient
Financial statements detailing personal retirement plans are not terribly popular with workers, and this could affect their investment habits, according to a survey by Standard Life.
Eighty-seven per cent of 1,371 Canadians with workplace retirement plans rarely or never make adjustments to their retirement investment portfolio based on information contained in their financial statements. Only 22 per cent of group plan members gave their statement a high grade for clarity and an appropriate level of detail.
The retirement plan statements are not widely used because they are hard to understand and lack personalized recommendations and specific suggestions to improve retirement income, found the survey. Most plan members (72 per cent) also believed their statement contains insufficient information upon which to base a change in their retirement planning.
The most common complaints about employer retirement statements:
36 per cent of workplace retirement plan members feel their statements are either difficult to understand or too technical
24 per cent believe their statements are boring
21 per cent of workplace retirement plan members find the information irrelevant because they are not yet thinking about retirement.
As a result, most people either skim over (49 per cent) or ignore (five per cent) their statements altogether. Sixty-two per cent spend 10 minutes or less reviewing their statement and 31 per cent have arranged to have professional help to read their statement.
“The status quo is not working and action is needed to make group savings and retirement statements more relevant and effective for retirement planning purposes,” said Anna del Balso, assistant vice-president of research and intelligence at Standard Life. “The financial services industry faces a clear communications challenge to fashion easily understood statements that inform, engage and, when necessary, provoke a change in direction.”