SIMSBURY, CT, April 30 -- Fewer than half of 401(k) participants say they are “very satisfied” with the service providers who handle the record keeping and investments for their plans, according to a recent study by the SPARK Research Group. The study shows that since 2000, satisfaction levels have declined in almost every service category — with the biggest drop in investment satisfaction. Only 48 percent of participants said they were “very satisfied” with their plans overall, compared with 53 percent in 2000.
"Driven by three years of a declining market, participant satisfaction with providers continues to fall," notes Warren Cormier, co-chairman of SPARK Research Group. "The good news is that most participants are not planning to reduce contributions or completely discontinue participation in their 401(k) plans," he added.
"Despite the bleak investment environment, participants seem to still have faith in the long-run prospects for the stock market," said Cormier. "In fact, only one-in-eight believe the market will continue to decline in 2003."
"On the other hand, only 20% of participants say they are 'very satisfied' with investment performance, down from 42% in 2000," said Bob Wuelfing, the other co-chair of SPARK Research Group. "Interestingly, even in a good year like 2000, participants’ level of satisfaction with the performance of their investment options was still low. We believe this is because participants always think someone else is getting better returns," he noted.
Wuelfing said that concern over investment performance was a reason behind the increase from 60 percent to 64 percent of participants who said it was "very important" for their employers to provide access to investment advice.
The SPARK Research Group study is based on telephone interviews with 2,700 participants in 401(k) plans. It was conducted between December 2002 and January 2003.
SPARK Research Group is a full service market research firm that deals with strategic and tactical issues, including loyalty and satisfaction, market segmentation, brand assessment, product development, and distribution strategies in the retirement services market. SPARK Research Group is an affiliate of RG Wuelfing & Associates.
RG Wuelfing & Associates is a leading provider of strategic consulting, market research and professional development programs for retirement services organizations. The firm founded and manages the Society of Professional Administrators and Recordkeepers (SPARK) and the SPARK Institute, an educational association focused on legislative issues affecting the retirement services industry.
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