The Technologically Savvy 401(k) Plan In Your Future

PSCA’s 61st Annual Survey: 43.6 percent of plans use mobile technology!

PSCA’s 61st Annual Survey shows that 43.6 percent of surveyed employers offer plans that use mobile technology – a rate that has doubled since 2014.

An article reviewing a recent study by the Spectrem Group, reported as key findings:¹ 

• More than 60 percent of plan participants own tablets and eight-in-10 DC retirement plan participants report using a smartphone with internet access and apps. 
• Sixty percent of plan participants said they would use video-chat capabilities on their personal computers to talk with financial professionals. 
• Almost 40 percent of plan participants research financial products and services online. 
• Eighty percent of plan participants get news updates from websites. 
• Smartphone usage among DC plan participants is up significantly from last year, now up to 71 percent, where PC/Mac usage has remained basically unchanged at 79 percent. Tablet or e-reader usage is trending upward from 57 percent in 2013. 

Simply, 401(k) participants are increasingly using mobile technology and social media. That is particularly true for Millennials, and we expect, future generations. If so, those are your 401(k) participants of the future. You may want to consider getting out in front of that parade.

Many industry advisors also expect to see increasing variety in how participants use web, mobile technology and social media – whether it be advice, research, service/product information, access to individual account information, video guidance and beyond.

Finally, I can’t leave this topic without encouraging plan sponsors to conduct a review of the technology deployed by their service provider – particularly the technology used to administer plan loans. For some plans, loan processing is an embarrassment, especially if you contrast it with the information shown above. That is particularly true with respect to plan loan processing after separation from employment.²

It is past time for plan sponsors and/or service providers to step up regarding technology.

¹R. Meigs, Embracing Social Media and Mobile Technology in 401k Communications, 401(k) Help Center, Accessed 1/2/19 at: http://www.401khelpcenter.com/401k/meigs_social_media_2014.html#.XCy_iVx... See also: Spectrem Group, Using Social Media and Mobile Technology in Financial Decisions, DC Participant Insight Series, 2017. https://spectrem.com/Content_Product/DC-2017-Social-Media-Mobile-Technol...
²Impediments to Saving for Retirement – Part 2 - The Solution? The Right Kind of Liquidity, 11/9/18, Accessed 1/2/19 at: https://www.psca.org/blog_jack_2018_51 See also: It is Not Borrow to Save, But Save to Borrow! 10/9/18, Accessed 1/2/19 at https://www.psca.org/blog_jack_2018_45