Communicating with Employees During COVID-19

Sources suggest topics to address with retirement plan participants and methods to do so in this environment of limited face-to-face contact.

The coronavirus threat people around the world are facing has left plan sponsors in unknown waters, navigating several tactics to connect with their employees.

Due to shelter-in-place orders and limited face-to-face contact throughout the globe, employers are primarily engaging with their workers online, especially when it comes to retirement communications. While email is the leading option for most, experts say they’re seeing plans sponsors connect via Slack, Twitter, company intranet platforms and, for those without electronic access, mail.

“Some employers who have the bandwidth are proactively reaching out to participants to provide information about the pandemic and resulting global economic crisis and its potential impact on their retirement plan accounts,” notes Rose Zaklad, principal at Groom Law Group in Washington, D.C. “Some employers are relying on their recordkeepers to provide this education.”

Employers can take the responsibility of updating their workers with news—which, most recently, includes how to stay calm with the recent market swing or on any alterations with the company’s retirement plan—or they can shift this onus to the plan’s recordkeeper or third-party administrator (TPA). If plan sponsors choose to go this route, they should still expect to review any communications sent out by the recordkeeper or administrator.

“Company benefit administrators should still review any forms from their third-party administrators in advance, to add any company-specific details as may be necessary, and confirm the communication meets the company-preferred messaging, especially if personalization is permitted,” says Victoria Zerjav, partner at Holland & Knight in Connecticut.

Because many TPAs have group communications already in place, an employer may want to supplement the general message with something more personalized, in a tone familiar to the workforce. However, given the swift pace of news today, personalization may be undercut by timeliness. “In these times of rapidly changing laws and the need to make decisions in relation to large groups, it is important that employees understand companies are working hard to reach out, even though each message may not be personalized,” Zerjav adds.

When it comes to the type of content being shared, Zaklad says recordkeepers are issuing notices and hosting webinars about investing during a period of market volatility. Employers are also checking in with their recordkeepers about any unusual activity in their plan, such as increased investment changes, Zaklad mentions. “They should avoid giving advice about investing, but could direct employees to financial education resources,” she says.

Retirement plan participants need to be informed about new rules for hardship withdrawals and loans. The industry continues to navigate the recently enacted Coronavirus Aid, Relief and Economic Security (CARES) Act and even the Family First Coronavirus Response Act (FFCRA). The influx of news may prove overwhelming for employers to decipher themselves. Consulting the plan’s fiduciary, or seeking outside counsel, can provide additional knowledge and a layer of protection to the employer. “We see a lot of employers working with outside counsel, because [the provisions of the law] are very complex and employees will have questions,” says Kelly Geloneck, an associate at Groom Law Group. “Some employers have been working with counsel on education about these paid leave policies.”

Plan sponsors may provide access to a company helpline for human resources (HR), along with telephone numbers and websites for companies and TPAs to assist those seeking early distributions and loans from their plans, Zerjav suggests. Additionally, some sponsors are presenting special webinars to their teams to provide information about the CARES Act and other coronavirus-related legislation. “This provides a platform for employees to ask the questions they have, which promotes the human resources team as a reliable and valuable resource for employees,” she says.

Because more industry news on COVID-19 is expected in the coming days, weeks and months, it’s especially important for plan sponsors to tread lightly when communicating with participants. Be wary to not provide specific investment advice when reassuring participants, Geloneck warns, and keep current with the new guidelines, even if the recordkeeper is handling the communication. “Employers are trying to be as responsive as possible to their participants but will need to be careful before communicating with participants,” she says. “Learn how to help and talk to participants, while keeping their retirement savings safe.”

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