Retirement plan participants know they should save for retirement but don't do enough about it, says a new survey by State Street Global Investors.

Part of that gap is created because people do not understand what their options are and they are confused by financial terms, says Kristi Mitchem, senior managing director and head of Global Defined Contribution for State Street Global Advisors.

The survey also shows that, contrary to popular belief, plan participants are willing to save more than they do if it is done automatically, says the Defined Contribution Investor Survey, which included 1,000 retirement plan participants. Even highly educated participants do not know how to take actions that are important.

The survey reveals 78% of plan participants know it is important to determine how much to save for a secure retirement, but only 33% claim to have the knowledge to determine that amount. At the same time, 65% believe diversity of investments is important, but only one third know how to do it.

"Evidence shows there is a gap between awareness and action," says Mitchem, who took part in a presentation of the survey Wednesday. Part of that gap is created because people do not understand the jargon that financial experts use, including such things as asset allocation, equity and fund.

"Others feel they do not need to know about details because they are in target date funds, but even many of those in target date funds do not know what that means," she says.

Additionally, 40% of the respondents say they are uncertain of the risk and return characteristics of common investments found in retirement plans, including international equity funds, stock index funds and stable value funds.

Approximately 67% say they know adjusting their investments over time is important but only 30% say the know how to do this.

The encouraging finding in the survey, according to the authors, is that plan participants have the ability and willingness to increase savings amounts. An overwhelming majority (83%) say they could cut their household budget by at least 5% to save more, and 64% say they could reduce their budgets by as much as 10% or more.

In addition, 52% say they would be willing to increase their savings rate to as high as 10% if their employer automatically increased their savings rate by 1% a year.

"We are encouraged that employees who participate in defined contribution plans know what is important, but they simply don't know what to do. We need to turn confusing tasks into clear steps, not with investment lingo, but with simple clear descriptions and explanations," Mitchem says.

Employers need to engage with participants more regularly about retirement and to repeat messages regularly using different mediums, from conversations with financial professionals to print, video and call centers, the survey says.

-Karen DeMasters