Whitepaper – Retirement Planning Needs A Better UX, by Shlomo Bernartzi
Companies are careful to consider the impact of ERISA fiduciary rules when managing their company’s 401(k) or defined contribution plan, but few are thinking about the impact of how information is displayed digitally and the impact on their retirement plan. Noted behavioral economist Shlomo Benartzi, UCLA Anderson professor, explores the issue in a Harvard Business Review article.
A vast majority of employees access their retirement plans digitally with a growing number using their smartphone. Thoughtfully redesigning the user interface can make a huge impact as evidenced by the improvements made by H&R Block on government student loans. The improved screen designed resulted in 25% more people likely to attend college. Over trading by investors focused on short term results was diminished in Israel by simply changing returns to longer term results.
Ultimately, record keepers will need to make the changes but plan sponsors should be aware and look for providers who are helping them fulfill their “digital fiduciary” obligations while improving outcomes for their employees.
