403(b) Summit: Education Should Start with the End in Mind

“What are your goals in education,” asked panelist William Corley, a consultant at Royal Alliance Associates, Inc. Will the education be teaching employees just about the 403(b) program or will it discuss the employees’ total benefits package? In Corley’s opinion, plan sponsors should be educating on total benefits. However, because not all 403(b) plans are the same and each covers a unique demographic of participants, all educational programs are dependent on their culture, he added.

Start with the end in mind, adviser Thom Shumosic, president of Rockwood Financial Group said. 403(b) and 401(k) plans are portals to what is supposed to be retirement income, so employers should be asking themselves if they care if people have enough money to retire. “What is your title or role,” Shumosic said, “that’s the big question.”

Other things to consider when implementing an educational program, according to Corley are whether to make meetings mandatory whether to give some incentive to employees to attend. Shumosic says he does group meetings and follows up with mandatory one-on-one meetings.

Shumosic notes that education for 403(b)s is difficult because it can be hard get people who have defined benefit plans interested in their 403(b), which is usually just a supplemental plan. Automatic enrollment is one way to get people involved in their plan, but it is just a start, Shumosic said. “Employees want help and they want their employers to help them,” he said.

Dan Otter, a former teacher who founded 403bwise, agrees. 403bwise creates customized 403(b) and 457 informational Web portals for plan sponsors to education their employees about their retirement program. There are various venues through which the education can be delivered in addition to Web sites, Otter said. Education methods can include benefits publications, postcards, annual notice requirements, and online professional development education credits. Some of the most successful programs are those embedded in professional development efforts, he noted.

Education presented in a sales environment is not good, Otter noted. It has to be presented in a way that truly teaches employees about their program. He also pointed out that often money for education programs is hard for 403(b) sponsors to find. However, plan sponsors can get money from the vendor, and they should include that need in an RFP.