Mary Martinis, Director-Retirement Plan Services, The Heestand Company, said the industry has been guessing what participants need and sending them messages in a variety of ways. She believes that one-on-one meetings work better because a sponsor or adviser can listen to why a participant isn’t saving and what he or she is afraid of.
Erica Stebe, Assistant VP, Client Communication Consulting, MassMutual Retirement Services, agreed, noting that participants get some 3,000 messages of some sort each day and they only effectively remember four. Your retirement plan message should use effective segmentation – the right message delivered the right way at the right time.
Scott West, Head of Consulting, Invesco Van Kampen Consulting, said Invesco has done one of the largest studies on investor language and found that only one language matters – that of the investor. “It’s not what we say, it’s what they hear,” he stated, adding that investors want a positive message. They don’t want to be spoken to in a fear-based way – not that messages should be all rosy, but there should be a positive spin. For example, he said a sponsor or adviser can talk about inflation risk or they can say, “Let’s talk about how we can make sure you maintain your lifestyle in retirement.”
Janet L. Ganong, Retirement Plan Consultant, The Kieckhefer Group, RBC Wealth Management, added that messages should be impactful – don’t just tell participants to save, but give them real numbers on how much to save; give them a target so they can develop a plan.
Stebe also suggested moving from education to action-based learning. “Every communication to participants should have the purpose of spurring them to take some positive action toward saving for retirement.” For example, Stebe said a targeted communication to automatically enrolled participants still at a 3% deferral rate could include a tear off deferral change card or a link to the site where they can make a change.
West said part of the problem with communications is starting with numbers too soon. Communication should lead with the benefit of the feature, such as auto escalation. He contends the industry has become to focused with "funding" retirement, rather than finding the right type of retirement for each individual. “Don’t start the conversation with numbers, start with what the participant wants his retirement to look like, then you will know what they need to do to get there,” he says.
Finally, Martinis said sponsors shouldn’t just look at what message to send, but how to send it. For example, Gen Y may not get around to opening a flyer sent in the mail, but they might open something on Facebook.Stebe added that Gen Y does not want an older generation to tell them why they should save, they want a peer to tell them how to accumulate savings.Audio of the conference panels will be available on PLANSPONSOR.com soon.