In the opinion of many, PBS is one of the last bastions of credibility in news and the program “Frontline” has served as a shining example of reliable reporting.
That’s why PBS and similar news sources resonate with our team at WordWrite. We pride ourselves on being honest brokers of communication in outreach to the media, emphasizing the authenticity and thought leadership credentials our business clients possess.
Hard-hitting journalism like the kind showcased on PBS comes with a responsibility and sometimes a cost. If you’re going to tug on Superman’s cape (metaphorically speaking), then it’s best to have your story straight.
That’s why it was so disappointing to see how PBS chose sensationalism over objectivity in a recent “Frontline” episode on retirement. It’s one thing for The National Enquirer to play fast and loose with the facts, but completely another to watch PBS take shortcuts.
It’s certainly no secret that workers across the country continue to struggle with retirement planning decisions and the topic of how much in fees all of us pay for our 401(k) plans now sits under a white-hot spotlight.
This “Frontline” episode, titled “The Retirement Gamble,” explored the idea that 401(k) participants might be – without knowledge –suffering losses as a result of higher costs associated with active vs. passive (or index) strategies for their investments.
We work daily with professional service clients who advise businesses and individuals on defined benefit (DB) pension plans and defined contribution (DC) plans like a 401(k).
So we understood that by focusing almost extensively on fees, the program’s producer, Martin Smith, failed to provide a balanced look at larger issues of where we get our retirement education, who is providing retirement advice and what type of knowledge the public needs to better equip itself to contribute to its retirement savings.
Smith largely ignored the shared responsibility both employers and their employees have to educate themselves about 21st century retirement strategies. For instance, in the summer of 2012, workers began receiving detailed information about the cost of their 401(k) plans, but a USA Today article pointed out that half still do not know how much they pay in fees.
“But we do seem to pay far more attention to the prices listed for milk and movie tickets than we do to the fees associated with the mutual funds we select for our 401(k) plans,” columnist Susan Tompor wrote.
Therefore, even an all index fund allocation strategy touted by Smith would do little good for those who have no idea how to invest.
Steve Utkus oversees the Vanguard Center for Retirement Research. He also happens to have an undergrad degree from M.I.T. and an M.B.A. from Wharton. He points out several flaws in the program, including the notion that most workers flourished under pension systems.
“The system was full of risks,” Utkus writes. “For example, you could spend your career at a company and find out at age 65 that the pension you were entitled to was inadequate. Or, if you changed jobs frequently, whether by choice or necessity, you often got little or nothing from the pension system. And few workers were aware of these risks.”
To his credit but at the expense of his credibility, Smith did answer the bell in an interview with FiduciaryNews.com reporter Chris Carosa after the program aired.
In Carosa’s four-part expose, Hilary Martin, a 401(k) plan advisor from California rightfully pointed out Smith’s admitted struggles as small-business owner and 401(k) plan sponsor, concluding that someone “who couldn’t get (his) own 401(k) plan right might not be the best person to ask to put together a documentary on the 401(k) industry.”
Later in the interview, Smith touted index funds as the best solution for investors primarily through using a seller of index funds as a major source in the program.
Countless industry experts skewered the program, leading Carosa to conclude the following: “Given the intent of ‘The Retirement Gamble,’ the content of the show unfortunately led respected objective observers, especially those who both write on the field and are successful practitioners within it, to conclude it was off the mark. Smith certainly had the weapons at his disposal to remove the perception of bias. He conceded to FiduciaryNews.com that he was only a generalist when it came to reporting and could in no way have known what experts know.”
A program like this episode of “Frontline” muddies the water in terms of the issues the thought leaders and industry experts we represent are trying to communicate related to saving for retirement. It was largely anecdotal and took shortcuts simply for the sake of entertainment or shock value. There were and are valid issues to explore. Why the rush to market?
That’s not what we look for from PBS, not the type of information we try to position to media we’ve cultivated relationships with and certainly not what our clients expect from us when emphasizing their authenticity and expertise.