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Changing Views on Plan Participant Education

The goal is to “grab them when they’re focused on it and get them to make a change then and there. “

Many plan sponsors expend significant effort on the participant education materials and education delivery methods used in their defined contribution  plans. Neither aspect is static, however: Both the materials’ educational focuses and content-delivery methods continue to evolve with plans’ goals and available technologies.

New Metrics

A plan’s definition of educational success starts with the plan’s stated goals, says Emily Costin, employee benefits/ERISA expert and partner with law firm Alston & Bird in Washington, D.C. For some sponsors, that means an increase in the participation percentage or an increase in contributions. Other plans might be focused more on improving asset diversification in participants’ accounts or having more participants name beneficiaries.

A growing number of plans focus on retirement readiness as an outcome, according to Joleen Workman, vice president, retirement and income solutions with the Principal Financial Group in Des Moines, Iowa. Principal has developed a retirement wellness score that uses a traffic-light analogy of red, yellow and green to indicate a participant’s readiness. Principal starts with plan data, adds in projected Social Security benefits, and participants can pull in external financial account data to estimate the degree of readiness.

These data feed into Principal’s new interactive digital assistant called My Virtual Coach. The service’s website promotes it as “holding a web-based, interactive conversation with individuals and infusing some humor and fun along the way. In less than 10 minutes, the resource walks participants through scenarios and empowers them to take immediate action as they step through the enrollment process.” As participants input assets and other information, they see an interactive chart that tells them what’s happening to their readiness score and how that’s going to play out for them over the years. Workman explains: “It will give them an accumulation view when they’re saving and, then, they can also have the ‘de-accumulation’ view once they’re in retirement.”

Greg Levinson, senior retirement consultant with Willis Towers Watson in Philadelphia, cites a similar development. The firm has developed its myFiTage application, which stands for financially independent target age. Participants provide the relevant information and the system’s modeling tools show them how changes will affect the retirement age at which they’ll meet their desired standard of living.

Historically, there wasn’t much tracking of education outcomes, says Levinson. That’s changing, he believes, with a focus on plan and participant outcomes for both the short and long term. “Are they doing the right things?” he asks. “How many people are using or deferring up to and beyond the match in a savings plan? How many people are participating beyond auto enrollment and auto-escalation and those kinds of things? So, that’s how we evaluate whether the plan is truly operating effectively looking at short-term and long-term outcomes.”

What’s Working? What’s Not?

Experienced plan consultants will remember the days when bulky “Dear Participant” packets arrived in participants’ mailboxes. Apart from a personalized account statement, the information in those documents was largely standardized. That approach is proving less successful, says Costin. Message-personalization is now the preferred method to get and hold participants’ attention. Emails sent from a person, rather than an anonymous blast delivery, work better. Personalized details also make it less likely the recipient will hit the delete button before reading the message.

Workman agrees. If the content is not relevant to the individual, they will not pay attention, she says, citing as an example: “One of the things that is top of mind for millennials is how do I manage saving for retirement with paying off my college debt? How do I do both? Do I need to just not contribute until I have my college debt paid for? That’s a very relevant topic for a lot of millennials. But, communicating that to someone who is 50 to 55 thinking about the de-accumulation and how they’re going to get income in retirement isn’t going to work.”

Catch ‘Em While You Can

Studies suggest that our attention spans are shrinking because we spend more time staring at computer, phone and tablet screens. Instead of fighting the trend, sponsors are providing education and recommending changes when participants are currently engaged, versus asking them to follow through later. The goal is to “grab them when they’re focused on it and get them to make a change then and there at some sort of an on-site meeting or benefit fair and using an iPad or sitting down at a computer with someone from the provider,” says Costin.

Providing education at the worksite is valuable, says Workman, but participants lose track of their intended changes if they can’t implement them immediately. “People don’t wake up thinking about saving for retirement every morning,” she adds. “Inertia kicks in and they just don’t get around to signing on at a later date.” 

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