Retirement plan participants might be behind the wheel of a savings vehicle, but few have any idea where to drive.

Employees struggle to manage their 401(k) plans, and that’s having a detrimental effect on their retirement confidence, according to recent research sponsored by New York-based digital advice provider Betterment.

About 17 percent of the plan participants surveyed, fewer than one in five, felt very confident that they would be able to retire when they wanted to, yet 85 percent of these plan participants said that their 401(k) assets would be the primary contributor or a significant contributor to their total retirement savings.

Participants who were less than confident in their retirement strategy were also 15 percent less likely to participate in a 401(k) plan.

Plan participants told surveyors that they didn’t understand how their 401(k) fees worked. Most respondents, 57 percent, said that they expected to pay less than 1 percent in fees, even though they were actually paying more, and 16 percent were completely unaware of how much their plans cost.

Employers appear to be over-reliant on education sessions provided by the provider or a third-party advisor to address employee confusion, according to the survey, yet the participants reported not getting much out of the sessions. 

Betterment’s research found that 60 percent of plan participants have access to such sessions, yet only 62 percent of those with access—37 percent of participants overall—actually attend them.

Among attendees of the sessions, only 55 percent report finding them valuable, meaning that only 20 percent of plan participants in the survey felt employer education was helping.

Many participants also told Betterment that they don’t trust their 401(k) provider, with more than half questioning whether their plan provider acts in their best interest.

Participants also mistakenly believe that providers are responsible for most account-level decision-making. In the survey, 62 percent of respondents reported the belief that their employer has no legal responsibility to ensure that the advice provided for their 401(k) investments is in their best interests.

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