Business Services Industry

American Express 401k Participant Survey Reveals Goal-Setting Drives Confidence in Retirement Planning; Survey Findings Consistent Even During the Bear Market

Business Wire, Oct 24, 2002

Business Editors

MINNEAPOLIS--(BUSINESS WIRE)--Oct. 24, 2002

American Express Retirement Services today announced the results of its 2002 Participant Satisfaction Survey, which found that participants who are confident in their retirement planning are more likely to have set a retirement goal.

The survey, which is sent out biannually nationwide to participants in retirement plans serviced by American Express Retirement Services, found that participants who say they have calculated the amount of money they will need to retire are 146% more likely to be "very confident" that they are doing a good job preparing financially for retirement than those who have not calculated a goal. The survey also found that participants in plans serviced by American Express Retirement Services had a higher likelihood of determining a retirement savings goal--52% of participants versus the Spectrem Group's national benchmark of 32%.

"These results validate what we've been telling both our clients and their plan participants - that goal-setting contributes to higher confidence levels," said John Baker, senior vice president of client services for American Express Retirement Services. "It's a driving force behind much of our education efforts, and it's gratifying to see that the number of our clients' plan participants active in setting goals is above the norm. In a prolonged bear market like this one, confidence takes a hit. Setting a goal helps reinforce the long-term nature of 401(k) investing, the benefits of dollar-cost-averaging(1) and asset allocation over a long period of time."

The 2002 survey also found that 85% of participants are eager to receive additional, non-retirement financial services through the workplace. This is an increase from American Express's 2000 survey that found 65% eager to receive additional, non-retirement financial services through the workplace.

"We're not surprised that these findings support our strong belief that participants today are more eager than ever for their employers to support their entire financial wellness, not just their retirement needs," said Baker. "Recent events in the market have made this even more urgent, and the numbers reflect that."

The survey also measures overall participant satisfaction with plan features, services, investments and communications, and is designed to help plan sponsor clients study the satisfaction level and needs of their plan participants.

The participant satisfaction survey was mailed to over 10,000 randomly selected 401(k) plan participants, and the results were based on 495 returned surveys--a return rate of 5%. The margin of error for the study results is plus or minus 4.5% at the 95% confidence level. To administer the survey, American Express Retirement Services teamed up with Spectrem Group, a recognized leader in information and strategic consulting within the investment services industry.

American Express Retirement Services, a service group of American Express Financial Advisors, is a provider of services for defined contribution and 401(k) plans with total combined assets of more than $29 billion and a participant base of more than 1 million as of June 30, 2002. Based in Minneapolis, they provide corporations, unions and municipalities nationwide with a complete package of financial education, recordkeeping and trustee services for qualified retirement plans. For more information on American Express Retirement Services, visit http://www.americanexpress.com/sponsors.> (1.) The Plan does not assure profits and does not protect against loss in a declining market.

Registered investments and financial planning services are offered through American Express Financial Advisors Inc., Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer. Retirement plan and trust related services are offered through American Express Trust Company.