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401k Plan Education: What Works and What Doesn’t


401kTV begins it’s remote video series with leading experts in the Defined Contribution industry. This series focuses on 401k plan education and explores behavioral finance subjects.

Fred Barstein speaks with Warren Cormier, CEO, Boston Research Technologies regarding behavioral finance issues within the defined contribution space. Warren discusses issues surrounding education of participants and addresses some of the educational programs and policies that have been ineffective.

Mr. Cormier suggests that many 401k Plan Education programs are written with too much jargon within the education literature which is beyond the comprehension of many participants who have only a basic financial literacy level.

Barstein notes that more effective 401k Plan Education programs are using a “just-in-time” approach to education and training citing research that shows people are more receptive to learning concepts when the are concurrent with the timing of life events such as the need for a loan.

Cormier adds that the closer to the actual event, the high the comprehension level will be about the subject matter. On the contrary, Cormier states that if you teach someone about dollar cost averaging, but the student will not apply that learning for another six months, they will not retain much of what they have learned.

About Warren

Warren Cormier is the CEO of the National Association of Retirement Plan Participants (NARPP). He is also the CEO of Boston Research Technologies (BRT), and Co-Founder of the RAND Behavioral Finance Forum.

Warren Cormier’s research and professional experience is in qualitative and quantitative experience in financial services research for investment companies, banks and the insurance sector.

His work includes projects that focus on strategic marketing issues, market segmentation, product development, customer satisfaction, consumer learning, decision-making processes, distribution issues, competitive assessments and marketing communications.

Mr. Cormier’s work covers a broad segment of the Defined Contribution Industry including the issues of plan providers, intermediaries, plan administrators and participants. Mr. Cormier is the creator of the DCP 2000-2009 plan sponsor satisfaction and market dynamics study. 401(k) record keepers representing 95% of all 401(k) assets and plans subscribe to BRG’s DCP study. DCP scores are requisite data for most DC industry plan provider search RFPs.

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein

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