COLLECTED WISDOM™ on Employee Education, Participation, and Communications

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What to Tell Participants About Tapping Into Their Retirement Savings

Participants may be worried. If the worst happens, they may look to their retirement plan as a source of financial relief. The ability to access retirement assets may be important for participants' peace of mind, but they must make an informed choice. While plan sponsors should review the plan's rules to help prepare their communications, the FAQs here offer a starting point for addressing participant inquiries.

Source: Blackrock.com, August 2024

Three Considerations for Navigating Participants Through Uncertainty

Volatility is a fact of investing life, but market turmoil on a large scale can raise concerns among even the most battle-hardened investors about long-term market trends and impacts. Here is what plan sponsors can do to help participants combat fear and stay invested during market volatility.

Source: Blackrock.com, June 2024

Chamber of Commerce, ERIC Plead for Fewer Retirement Plan Disclosures

Industry groups have asked the Department of Labor, Internal Revenue Service, and Pension Benefit Guaranty Corporation to simplify and improve retirement plan disclosures with specific recommendations in response to a request for information issued by the DOL in January. The interest groups agree that most participants do not read nor understand many disclosures related to their retirement benefits.

Source: Planadviser.com, June 2024

The Art of Communicating to Employees: A Guide for Plan Sponsors

In a 2022 study by LIMRA, 60% of retirement plan participants in the study felt that communications about their plan were "ineffective." This lack of productive communication may lead to lower enrollment, and indifference about plan benefits, and perhaps contribute to overall employee apathy, morale, and productivity issues. Here are some insights on how to successfully reach participants about their retirement plan in a way they understand and is meaningful to them.

Source: Planpilot.com, April 2024

How Firms Are Closing the Gender Gap in Retirement Savings

The battle to close the economic gender gap extends beyond workplace wages to retirement savings. According to T. Rowe Price, women are making lower contributions to their retirement accounts and have lower balances overall, with the median 401k balance for women being a whopping 65% less than their male counterparts. While some factors demand systematic change beyond the financial services industry, firms can take steps to better support female participants by working to improve financial literacy among women, providing inclusive inputs for retirement readiness tools, and offering a balanced suite of education content and practical tools within the participant site.

Source: Corporateinsight.com, January 2024

How Social Media Influences Plan Sponsors' Communication

When crafting messages for up to five generations of workers, a more succinct, informal approach can help maximize the exposure. Big, blocky chunks of text are out. Short videos and visuals that succinctly drive home a key point are in. Email may reach older generations, but Facebook, LinkedIn TikTok, or Instagram are how many younger plan participants get information.

Source: Plansponsor.com, December 2023

How to Plan, Craft Successful Participant Communication

Plan sponsors view communicating information to retirement plan participants as a critical function to connect employees to benefits, educate participants on the offerings, and help them properly use their benefits. Here plan sponsors and communications professionals examine the importance of reaching out to participants and how it can improve retirement savings.

Source: Plansponsor.com, December 2023

Boosting Participant Engagement

By implementing automatic features, using targeted communications, and speaking to participants on a personal level, plan sponsors will be more successful in driving engagement, according to experts.

Source: Plansponsor.com, July 2023

Quit Using 401k Financial Jargon, Once and for All

The damage an overreliance on financial jargon can do to participant confidence and, by extension, the advisor's business is well-documented. Still, a new survey brings it (yet again) into stark relief.

Source: Napa-net.org, June 2023

Workers React to Retirement Language and Imagery

Organizations are taking a psychological approach to analyze the way Americans think about their retirement. New research from Capital Group studied close to 2,500 American adults and how they respond to retirement language and imagery, confirming a finding that the industry has understood for some time, there is no one-size-fits-all approach to retirement communications.

Source: 401kspecialistmag.com, November 2022

Guiding Through Uncertainty: Ways to Connect With Participants

When uncertainty hits, it's natural that 401k participants will have questions, especially those who don't have a lot of investment experience. Plan sponsors can do a lot to allay their concerns by proactively reaching out and addressing the benefits of staying invested, the impacts of taking early distributions, and even the strength of the plan design can help keep jitters in perspective.

Source: Blackrock.com, September 2022

Communicating About Retirement Benefits Crucial to Retention

Employees say retirement benefits are important when deciding whether to leave an employer, but many employers are missing key opportunities to tell them about their benefits. More than 8 in 10 employees (82%) say their benefits -- specifically their retirement benefits (77%) -- are highly important in deciding whether they will change jobs, according to TIAA's 2022 Employee Retention Survey. And this comes as nearly a third of employees say they are considering leaving their jobs this year.

Source: Napa-net.org, June 2022

How to Communicate With Your Plan Participants Right Now

With ongoing market volatility and increasing chatter about a potential bear market, some retirement savers may be feeling more anxious about their investments than they have in the recent past. For plan sponsors, the recent economic turmoil is an opportunity to connect with plan participants to educate them on the current markets and the best moves for their financial security. Experts say that using in-person and virtual one-on-one consultations and communicating across different media, including text messaging and email, can reach the broadest swath of participants.

Source: Plansponsor.com, June 2022

Delivering Robust Retirement Communication and Education on a Budget

Plan sponsors can get creative to deliver effective, low-cost retirement communication and education to plan participants. Minding the budget, and aided by trusted plan sponsor partners, employers can take advantage of interesting ideas to communicate with and educate participants for maximum impact.

Source: Plansponsor.com, May 2022

Considerations for DC Plan Sponsors Integrating ESG Investments

Challenges for plan sponsors with participants showing greater interest in sustainable investment and ESG funds are myriad, according to industry experts. Plan sponsors must determine the plan's ESG philosophy and goals for sustainable investing and communicate these to plan participants. But plan sponsors' communication with and education of participants must account for fiduciary obligations, and not constitute investment advice under the ERISA.

Source: Plansponsor.com, April 2022

Virtual 401k Education Is on the Rise, Reaching More Workers More Efficiently Than Ever

Workers attended more virtual education sessions last year than ever before to learn about their 401k plans and other financial topics, according to new data from Schwab Retirement Plan Services. Participant viewership for virtual live and on-demand sessions was up 33% year-over-year in 2021 as the number of onsite in-person meetings dropped to near zero because of the pandemic.

Source: Businesswire.com, March 2022

ESG and Participant Communications

Many plan sponsors are at various stages of considering how to incorporate ESG into their retirement plan design and fund offerings. Plan sponsors that have incorporated ESG in their retirement plans are looking for best practices when communicating with participants about ESG. This piece is intended to provide such plan sponsors and their service providers with a framework for engaging participants on the topic of ESG and how it may be integrated into their retirement plan communications.

Source: Dciia.org, March 2022

How Simple Reframing Can Boost Retirement Savings

"Pennies" over "percent"? A new study finds that a simple change in information architecture, such as how the savings rate is framed, can lead to a significant boost in savings behavior among lower-income employees.

Source: Napa-net.org, February 2022

Plan Sponsors Should Eliminate Jargon in Their Communications

An Empower white paper makes the case that retirement plan sponsors and advisers should use simpler language in retirement plan communications, finding that participants are more likely to act on their retirement plans if they receive direct language. The report, conducted with research from the Harris Poll, stresses the importance of simplicity in communications, explaining that financial terms such as "deferral" and "allocation" can scare employees away from participating in a plan.

Source: Plansponsor.com, September 2021

How the Use of Fear May Improve 401k Participant Engagement

While providing communications on retirement readiness can significantly improve participant engagement, the use of fear as a behavioral tool may be a better way to rouse unengaged participants.

Source: Napa-net.org, August 2021

Engaging Participants: Communication Strategies for DC Plan Sponsors

With success measurement largely limited to the accumulation phase, participation becomes a major criterion, but helping participants to help themselves requires engagement. How do plan sponsors achieve this level of engagement or action from participants? Are defined contribution participants more likely to respond to messages of fear or encouragement? This 4-page report explores key questions that plan sponsors often ask and offer recent research to help provide answers.

Source: Dciia.org, July 2021

Developing Successful Participant Education Strategies

Plan design features that turn employees' inaction into positive savings behavior, like automatic enrollment and automatic escalation, can increase a plan's participation and contribution metrics. But employees who understand the importance of their employer's retirement plan benefits and who are actively engaged in saving for retirement will improve their odds of meeting their retirement income goals. An effective plan participant education strategy can also help workers make informed financial decisions in other areas of their financial lives.

Source: Newportgroup.com, June 2021

Refining the Language of Retirement

Though the use of confusing jargon remains prevalent, new Invesco survey data suggests the financial services industry has made progress in improving understanding of the defined contribution plan system.

Source: Planadviser.com, May 2021

Higher Education Plan Sponsors Seeing More Demand for Participant Investment Help

A study on higher education retirement plans from Voya found 43% of plan sponsors say motivating employees to save adequately and invest wisely are top challenges to helping their employees prepare for retirement. Interestingly, a separate study from Transamerica found more than half (59%) of higher education institutions view motivating faculty and staff to save adequately for retirement as their greatest challenge in managing their retirement plan. Forty-seven percent said it was helping participants invest wisely.

Source: Plansponsor.com, April 2021

Demand Rising for Virtual and Self-Service 401k Education

The popularity of virtual and self-service 401K educational sessions has grown since the start of the pandemic, but apparently that trend was accelerating even before then.

Source: Napa-net.org, April 2021

The Line Between Education and Fiduciary Advice

Does the industry have a clear definition of what the DOL would consider investment education (not advice) in a 401k plan so that a financial advisor would not have to follow the requirements of Prohibited Transaction Exemption 2020-02?

Source: Napa-net.org, April 2021

Pandemic Reveals Demand for Virtual and Self-Serve 401k Education: New Schwab Data

With the multiemployer relief legislation cleared from Congress' docket, look for policymakers to turn to efforts to expand retirement plan coverage, ARA staff explained during a March 23 NAPA webcast. Will Hansen, Chief Government Affairs Officer at the American Retirement Association, and Andrew Remo, the organization's Director of Legislative Affairs, offered their take on the legislative outlook for the rest of the year, as well as what retirement policy provisions we may see in forthcoming legislation.

Source: Businesswire.com, March 2021

Few Powering Up With Electronic Disclosure

When the DOL finalized a rule in May that permitted default electronic delivery of retirement plan disclosures, recordkeepers, and plan sponsors welcomed the move by saying it will increase participant engagement and cut mailing costs. While those points still hold, since the rule went into effect July 27 there hasn't been much movement to implement default electronic disclosure programs.

Source: Pionline.com, October 2020

A New Education Priority for 403b Plans?

There's been a shift in emphasis on retirement plans in the non-profit sector. For the first time, organizations that provide 403b plans reported that retirement planning, rather than increasing participation, was their top focus for employee education, according to the 12th annual 403b Plan Survey from the Plan Sponsor Council of America.

Source: Napa-net.org, October 2020

Communication Best Practices

Communication with employees about benefits is always critical. And now there's an added wrinkle, the pandemic. It's changed the rulebook, at least in some ways, and a recent blog entry offers suggestions on communicating in this upended environment.

Source: Asppa.org, September 2020

The Benefit of Saving Regularly for Retirement

Supplement participant conversations about how much to save for retirement with this helpful article regarding the 15% rule of thumb. The article explains how saving at least 15% of gross income (including employer contributions) can allow individuals to save enough for retirement that could last decades. An automated approach to saving regularly ensures it's a priority and helps take the emotion out of investing.

Source: Troweprice.com, August 2020

Participant Engagement: Determining Your Audience's Preferences

One of the challenges associated with successfully engaging retirement plan participants is figuring out your audience's preferences. Understanding a participant's behavior is the key to successful engagement. Here are some of my behaviors that are relevant to the engagement process.

Source: Cammackretirement.com, August 2020

Not "Wired at Work"? New DOL E-Disclosure Rule is Here to Help

The DOL announced final regulations that describe new "safe harbor" procedures for electronic delivery of required ERISA retirement plan disclosures such as Summary Plan Descriptions, quarterly or annual account statements, and other items. The new safe harbor procedures are an addition to the DOL e-disclosure rules that date back to 2002 and represent an improvement on the 2002 rules for employees who are not "wired at work," as defined in those regulations. The safe harbor procedures took effect on July 27, 2020. A plan administrator that relied on the safe harbor before that date wouldn't be subject to enforcement action, the DOL vowed.

Source: Eforerisa.wordpress.com, August 2020

What Employers Should Know About the DOL Final Rule for Electronic Disclosure

On May 27, 2020, the DOL issued a final rule that makes it easier for employers to provide required disclosures to retirement plan participants and beneficiaries. The final rule provides two additional safe harbors for the production of retirement plan disclosures via electronic media: the "Notice and Access" safe harbor and the "Direct Delivery Via Email" safe harbor. Here are the key points that employers should know about the new safe harbors.

Source: Thompsoncoburn.com, August 2020

How to Communicate Employee Benefits in Uncertain Times

As employers plan for open enrollment season careful consideration and planning should be given to how to communicate benefits holistically. If shelter in place orders and social distancing practices are still in effect during your enrollment window, it will also impact which communications channels are needed to reach employees.

Source: Voya.com, July 2020

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