While many employees and retirees hope to stretch their 401(k) plans well beyond their original purpose, 84% of polled executives responsible for such plans say only some or very few employees will be financially prepared for retirement, a new Deloitte survey says.

"From this survey we've learned that for the past several years Americans have not been saving and investing enough for retirement," says Stacy Sandler, principal, Deloitte Consulting LLP. "Rising health care costs and dropping 401(k) balances have taken their toll on employees. Those factors, combined with record levels of personal debt, high unemployment and low levels of personal savings continue to paint a highly concerning picture of retirement readiness."

Plan sponsors remain steadfast in their obligation to prepare employees for retirement. Nearly two-thirds of respondents (64%) believe their responsibility includes taking an interest in whether employees are tracking towards a comfortable retirement.

To encourage plan participants to make better use of their 401(k), nearly half of plan sponsors are offering features that automatically increase participants' contribution levels. However, nearly two-thirds (64%) of plan sponsors report that fewer than 10% of participants take advantage of this opportunity.

In another effort to encourage plan participants to save more by becoming better informed about their benefits, the Department of Labor issued regulations in 2010 that required regular communications to 401(k) participants — the first round of these disclosures are due this spring. Unfortunately, Deloitte finds only 39% of respondents who say they are very informed and included in the design process when it comes to their ability to deliver the disclosures

"We're hopeful that most companies have fully incorporated required disclosure delivery into the design of their 401(k) plans," says Sandler. "Some 401(k) participants already have their first round of communications in-hand and everyone else should have their plan communications in early May."

Another key area plan sponsors aim to address is plan fees. According to the survey, 79% of plan sponsors indicated it is quite important or very important to improve understanding of (and potentially reducing) plan fees. On the positive side, 83o% f plan sponsors believe their 401(k) fees are competitive.

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