How Leading Advisers Break Through Sponsor Inertia

Engaging plan sponsors in a meaningful dialogue to enhance the success of their retirement programs has never been more challenging.
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Sponsors’ focus on plan costs can create a roadblock to delivering the best overall plan results unless they can be shown how improvements can be made in concert with cost management.  Cost concerns coupled with the amount of time sponsors dedicate to health care programs— especially now with the Affordable Care Act—make it easy to see why many advisers feel frustrated when trying to address the pressing need to improve retirement plan outcomes for both the company and its employees. 

To tackle these challenges, leading retirement advisers provide information that creates both a sense of urgency and a sense of comfort that meaningful change can be pursued.  These leading advisers demonstrate a passion for improving retirement plan effectiveness, often acting as the single most important influence with plan sponsors and the decisions they make.  Leading advisers are making impactful changes and cementing their client relationships along the way. 

Working in close partnership with advisers and sponsors around the country, Prudential Retirement identified impactful ways advisers and providers are motivating plan sponsors to ensure their plans are optimally structured to create results they and their participants want and need.

#1:  Be Strategic in Your Discovery

Traditionally, many advisers and providers have engaged sponsors in annual planning by setting goals for incremental improvement around key participant metrics.  For example, they set goals focused on participation rate or the average savings rate to rise above current levels.  From the participant’s perspective, every little bit helps.  But, these types of incremental steps are not improving the majority of participants’ retirement readiness.

Leading advisers approach the planning process as an opportunity to pursue a more strategic conversation with sponsors.  They're asking different questions that help take the annual planning process to a new level and a more strategic purpose.  For example:

·         What are the overall benefit objectives of the sponsor?

·         Are the current retirement programs fully meeting these objectives?

·         Is the DC/401(k) plan considered a primary or supplemental program for achieving participants' retirement income needs?

·         Are the retirement programs primarily intended to benefit longer tenured employees?  All employees?  Older employees?

·         If there is a defined benefit (DB) plan, how is it projected to change over the next few years?  Is it currently frozen?  Will it be frozen?  What are the implications?

·         What's the purpose of any non-qualified plan that may exist?  Is it designed to give executives or other key categories of employees a way to save beyond the other retirement programs? 

·         How does participant-level retirement readiness impact the sponsor’s workplace and working community?

·         How should participant retirement readiness be measured?  How do those measures compare to the actual participant level readiness in the plan?

Asking these strategic questions provides opportunities to make more impactful changes to the plan's overall structure as well as how employees are utilizing it.

#2:  Use Information to Influence Action

Armed with a clear understanding of the sponsor's strategic objectives, today’s leading advisers bring powerful information to the table to create a sense of urgency that changes should be made now. 

Analysis can go straight to the heart of the issue most near-and-dear to the sponsor.  Namely, where is the money going?  Are we spending benefit dollars wisely?  Who is benefiting from our contributions to the retirement programs?

Information can also be presented which help sponsors clearly define options to achieve their strategic goals while avoiding their pain points.  For example, leading advisers demonstrate that changes to a plan's matching formula may simultaneously improve participant savings while lowering the sponsor's overall financial exposure.  That type of analysis can overcome the objections of even the most cost-conscious plan sponsor.

#3:  Make Recommendations to Enhance Outcomes

Advisers can also help sponsors evaluate options for the plan's design, investment lineup, and participant engagement. Advisers are able to define these options by working with providers who offer access to the right information and experts to help design, manage and evolve the plan to achieve their strategic objectives.

When it comes to plan investments, advisers are helping sponsors ensure their fiduciary duties are met by presenting a broad range of choices not only focused on individual asset classes, styles, and managers but also on flexible asset allocation tools and investment product structures.

In the area of participant engagement, advisers and providers are embracing new ways to inspire participants to take action based on emotional and rational techniques – by humanizing the approach.  Customizing messages based on the participant's personal situation, focusing on their household’s specific retirement income needs and finding ways to celebrate positive actions taken and milestones achieved along the way.




Change the Conversation

Breaking through sponsor inertia requires leadership.  By focusing on strategic objectives, presenting compelling information, and identifying clear options to minimize pain points and allow the sponsor to spend their contribution dollars more wisely, advisers can stimulate a fresh dialogue to enhance retirement plan effectiveness.


Harry Dalessio is senior vice president, Sales and Strategic Relationships at Prudential Retirement. Dalessio leads national sales, including full service corporate, tax exempt, stable value, pension risk transfer and institutional income, plus the channel management team responsible for developing and implementing Prudential’s Retirement’s channel strategy.  Channel management focuses on strengthening relationships with key intermediaries (consultants, advisors and third-party platforms).



Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company, Hartford, CT or its affiliates.

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NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.