The headline is a spin-off of a Mike Myers quote in the 2003 movie, View From The Top.

Didn’t see the movie? A lot of folks didn’t since it only grossed $15,614,000 domestically and $3,912,014 internationally, totaling $19,526,014 worldwide.

So let me fill you in. It’s about a young woman from a small town who sets out to fulfill her dream of becoming a flight attendant played by Gwyneth Paltrow.

That’s Myers pictured above as legendary flight attendant trainer, John Witney, humorously mocking the poor pronunciation skills of a trainee flight attendant when he says:

You put the wrong emPHAsis on the wrong syllable.

So what’s the 401(k) connection?. Simply this – and let’s put the mocking tone aside –many plan sponsors are not emphasizing what really drives retirement plan success for participants.

While much of the attention has understandably been on fees, the most important drivers are deferral rates and plan design.

That’s what the research is beginning to show. A recent Putnam Institute study suggests plan sponsors should redirect their focus from fund performance to increasing deferrals as a means of increasing plan participants’ retirement assets.

While fund performance is important, the fund-centric focus may not be the best means of preparing participants for retirement, according to the Putnam research.

  • Fund Selection. Putnam found that, regardless of the fund selection strategy, fund selection generated roughly the same amount of retirement wealth.
  • Asset Allocation. Putnam cautioned, however, that while asset allocation can be a bigger driver of portfolio return than the composition of the underlying funds, changing asset allocations carries the material risk of a severe decline in uncooperative and volatile markets.
  • Rebalancing. Putnam noted that rebalancing a portfolio produced a slight increase in retirement wealth, but with considerably reduced volatility. The moderate growth and better return/risk ratio placed account rebalancing between asset allocation changes and fund selection as a driver of long range returns.
  • Participant Deferral Rates. In the most noteworthy finding of the analysis, Putnam determined that even incremental increases in participant deferral rates can be one of the most effective drivers of long-term return.

You can view the complete,aptly named study, Defined contribution plans: Missing the forest for the trees?, here.

My takeaway: it’s a good opportunity for plan sponsors to consider or re-examine auto-enrollment with auto-escalation.