J.P. Morgan Asset Management has launched a new communications program designed to deliver a simplified explanation of its SmartRetirement series of target date funds. The new program will feature animation, infographics and simpler terminology. The program is one way the company is hoping to increase the number of people who read plan documents, and in turn, increase the fundamental understanding by participants of how these plans work.
Research has shown that while defined contribution plan participants want access to target date funds for retirement savings, they do not understand some of the most basic components of how target date funds work, said Catherine Peterson, director of retirement insights at J.P. Morgan Asset Management in a statement. Given the growing importance of target date funds in plans, we developed this program to specifically address identified participant knowledge gaps.
The company found that participants were unclear on the meaning of the date in the fund name. Many also did not understand that the funds were already fully diversified and that target date funds do not provide guaranteed income in retirement.
J.P. Morgan's recent research shows that 75% of participants say they dont take the time to read all of the investment information that is currently provided to them. Also, 44% say they are already getting more information than they can absorb. It believes this is a key reason for the lack of understanding of how these funds work.
J.P. Morgans goal was to address the knowledge gap as well as the communication approach with its new program by making it available to all J.P Morgan SmartRetirement clients regardless of the recordkeeper servicing their plan.