According to Michael Kiley, president and owner of PAi, Inc. a third-party administrator (TPA) and recordkeeper for the small plan market in Green Bay, Wisconsin, most people don’t want to know what the retirement industry knows. “We talk to each other by playing games and sharing humor,” he told attendees of the Plan Sponsor Council of America’s (PSCA’s) 66th Annual Conference.
For example, Kiley said his firm tested the use of lifetime income on participant statements and found something that works better. Instead of a monthly income projection, PAi communicated to participants how many years of retirement they had accumulated savings for. They also offered a mobile application that told participants “click here to get ‘x’ more years.”
To make the message relatable, the app positioned retirement as a tangible product choice, for example, by asking participants, “Do you want a big screen TV or 2.5 more years of retirement?” In the spirit of gaming, Kiley said to tell people how to accumulate things (i.e., more years of retirement).
Kiley contended there is no coverage problem in America; there are a variety of tax-advantaged vehicles for individuals to save for retirement. But, people do not know how to “buy” these products. Kiley suggested using language individuals can relate to, just as car manufacturers did when they started measuring miles per gallon (mpg). Kiley said easier language makes it easier for people to talk to each other.
Kiley suggested giving points and rewards for good plan behavior, such as a plan coupon for correctly answering a trivia challenge or points (to cash in for rewards) for positive savings actions. In addition, plan sponsors and providers should use networks on which people share, such as Facebook. Kiley also suggested using brands people know; for example, an NFL theme could be something like “1st and 10%.”
Kiley said one rule is that providers cannot pay rewards; they cannot pay to get assets. An attendee also told the audience to keep in mind that prizes to employees may be considered taxable income.
Aside from plan sponsors using these strategies, Kiley said states should get involved and use such gaming techniques for their citizens, because their economies will suffer if retirees do not have money.