PANC 2010: Breaking it Down

 Despite all the efforts of plan sponsors and providers, there is still a lack of understanding of retirement plans and investments by participants, and sponsors still struggle with ineffective employee communications.

Paul D’Aiutolo, ERISA Consultant, UBS Financial Services Inc., told attendees at the PLANADVISER National Conference that sponsors want plan success and a better participant experience. Sponsors and advisers can use education targeted at employee demographics to achieve this.  

Sherri Fitts, Director Communications and Large Plan Sales, The Standard, noted there are a variety of ways to slice the participant base, so sponsors should begin by deciding what they want to influence: participation, savings levels, investment diversification, or something else. Chris Augelli, VP, Alliance Programs & Business Development, ADP Retirement Services, said advisers should ask sponsors what targeting makes sense for their employee demographic.  

Kris Gates, AVP, Participant and Interactive Marketing, MassMutual Retirement Services, pointed out that communications could also target different savings stages, ages, and genders.  Fitts added that income levels are also a good target if the sponsor wants to increase participation, because lower-income employees tend to participate and save less.  

Gates noted that targeted communications typically focus on increasing participation and savings rates, but a sign of plan success is the income replacement ratio it will provide participants in retirement. D’Aiutolo said a goal of targeted communications can be to help employees understand their retirement income gap.  

According to Augelli, it is valuable to the know participant demographics, but the real value is in effective delivery, which comes from partnerships between advisers and providers. Gates said sponsors and advisers must first determine what method of delivery participants are most likely to respond to: mailings, paystub inserts, Internet, or email, for example.  If you don’t know, use a variety of methods first to determine what works best.  

Augelli said in-person meetings and personalized enrollment sheets are effective. If employees are in a variety of locations, and advisers can’t get to the sites, they should have phone consultations.  

Gates said advisers shouldn’t get in the way of employees taking action; start with how to enroll, then discuss other items such as plan terms, investments, or proper diversification.

Targeting Younger Employees and Different Ethnic Groups  

Gates told the panel at the PLANADVISER National Conference that it can be a struggle to engage the youngest employees in their employer-sponsored retirement plan, as they can perceive that there is no immediate gratification since they are so far from retirement age. The youngest demographic will respond better to texting, social media, peer discussions, or a mentor, than to the old methods of post cards and emails.  

Fitts suggested that for the younger demographic, advisers and sponsors engage them emotionally.  In communications, focus on the purpose of saving for retirement, the imagery of retirement, and stories about someone they know in retirement. These things stir emotions and lead to engagement, she contended.  

For different ethnic groups, Augelli suggested sponsors and advisers partner with providers of that ethnic group or deal with that ethnic group.  A conference attendee said it is helpful to win over a center of influence – a peer or supervisor that is respected by the ethnic group.