This disparity suggests that simply offering employees a tax-deferred savings vehicle does not guarantee a secure retirement for most Americans. It's unrealistic to expect employees to not only save diligently but also to invest successfully with limited guidance and sometimes questionable options. The bad news is that many of them don't understand where their money is going. They don't know how their plan assets are allocated, nor do they understand the relative risk of fund choices. Ultimately, they expect their employer to help them figure it all out.
Employers really have their hands tied.
The foremost of these issues is providing employees with investment guidance. As the plan fiduciary, the employer has an obligation to offer as good a plan as reasonably possible and manage it prudently on the employees' behalf. Fiduciaries are the people ultimately responsible for all decisions that affect a retirement plan, and, regardless of what they may be told by financial organizations or advisors, they never, under any circumstances, escape this legal responsibility. What many employers don't understand is that their fiduciary duty requires them to set the plan criteria, select funds that meet that criteria, and regularly monitor those funds to be sure they continue to meet program objectives. This requirement is perhaps the most overlooked fiduciary duty with the greatest associated liability for employers.