Developing a Participant Education Strategy

January 18, 2013 ( - Resolutions are abound this New Year—many of which are financial in nature and involve decisions to save more, spend less and move forward with a more educated approach to financial wellness.

This year, many plan sponsors may be looking to renew employees’ confidence in their ability to save for the future and achieve retirement readiness.   

An evolution of retirement plan education is underway, largely driven by a growing interest among employers to provide 403(b) plan education and communication that address the needs of a diverse workforce, including varying degrees of financial literacy.   

Many organizations are now creating Education Policy Statements (EPS) and Education Strategy Documents (ESD). These tools help employers achieve their plan’s objectives and strengthen relationships with employees to help ensure plan participants accumulate enough assets to take them through their retirement years.   

There are several important points for plan sponsors to consider when developing an EPS and an ESD.  Here we’ve broken down some of the key questions plan sponsors ask about creating these tools:   

1. What are the basics behind Education Policy Statements and Education Strategy Documents?   

An Education Policy Statement (EPS) provides the overall policy direction and procedures that guide the development of ongoing communication and education. This “compass” helps direct the entire education program and includes various components such as an overview of the plan, the overall objective of the plan, the organizations’ education philosophy, any quantitative and qualitative goals to measure the success of the program, and a clear definition of roles and responsibilities for the plan sponsor and provider.   

With this directional compass in place, the ESD, or “road map,” targets implementation of the program. The ESD is specific and includes any issues or problems that exist within a particular organization including specific employee segments to be targeted, communication objectives, a calendar of communications deliverables, and annual goals and measurement of the program. An effective ESD is particularly important for health care organizations, which are often comprised of various levels of financial literacy and around-the-clock work schedules.

2. What is the best way for an organization to develop these tools or devices?  

To begin, plan sponsors should assess basic plan metrics including participation rate, average deferral rate, asset allocations of participants and average participant balances. Organizations can then examine the different savings behaviors of their participants based on salary level, employee location, employee schedule and employee age.  From these metrics, plan sponsors should be able to identify any disparities that arise in the metrics and some of the challenges they may face in communicating to their participant population. This is an ideal starting point for determining where an organization needs to be to achieve program goals and how they might best develop a plan policy and strategy.   

In order to provide employees with effective education, plan sponsors should work closely with their retirement plan providers to establish a program that meets their specific needs. A formal policy statement may not be right for every plan or company, but creating a working communication and education strategy document is a good exercise to identify goals, deploy campaigns and assess results with every retirement plan.    

3. What is the difference between an Investment Policy Statement and an Education Policy Statement?  

Until now, plan sponsors have been more familiar with an Investment Policy Statement (IPS), which is traditionally established to provide policy direction and procedural guidelines that will allow for the selection and ongoing monitoring of investment options and service providers under the plan, to comply with the fiduciary responsibility standards imposed by the Employee Retirement Income Security Act (ERISA), and to meet the plan’s objectives. In contrast to an IPS, the EPS does not help fulfill a fiduciary responsibility. Rather, it helps key members of the plan sponsor organization come to agreement as they make decisions that will influence the high-level strategic direction of participant communication and education programs.    

4. How can EPS and ESDs benefit 403(b) plan participants?  

In addition to helping all parties work together and focusing organizational investments in the education program, EPS and ESDs help demonstrate the plan sponsor’s commitment to employee education.  Consistent, effective employee education enriches employees’ understanding of their retirement plan’s features and helps participants create personal retirement savings strategies that lead to retirement readiness.   

By now, we’ve had the opportunity to talk with plan sponsors who have put these educational tools to use.  Feedback has been positive among participant populations, who feel better equipped to save for their future and feel a greater level of educational support from their employers. Being fully transparent with a retirement plan strategy allows plan sponsors to engage participants, demonstrate their partnership in the savings process and help them understand the objectives of the retirement plan. One way plan sponsors are doing this is by posting policy statements on company intranet sites for employees to easily access the documents at their convenience.   

Good planning is integral to realizing positive results.  A clearly articulated road map towards better retirement outcomes for participants focuses resources, budgets and time.  The EPS can also be used to clarify roles and responsibilities when it comes to developing, deploying and measuring the programs articulated in the strategy document.

5. How do organizations measure the success of these programs?     

Measures of success of a retirement communication and education program should be clearly defined in the EPS and ESDs.  Learnings should come from evaluating why a campaign or program fell short or exceeded expected results.  By clearly defining success in policy statements, participant outcomes can be compared to determine the effectiveness and identify key takeaways for future improvements.   

Organizations are measuring the success of their education plans by evaluating whether participants are taking advantage of all provider services—including one-on-one consultants—and if they are maintaining an active role in reviewing their retirement accounts. Another measurement of the success of EPS and ESDs is whether there is a fluctuation in participation rates and deferral rates. These measurements provide actionable items for organizations to focus on moving forward. For example, if an organization notices that participation rates are higher among older populations of the workforce, they may consider targeting younger workers through dedicated campaign tactics.   

An EPS should have longevity and be a guiding force for retirement plan decisions year-over-year. An ESD can be more nimble and evolve with the goals, behaviors and needs of the organization. Success measures in the ESD can be very specific (i.e., improve participation by XX% or XX% of XXX location attends the seminar, etc.).  If something isn’t working well, sponsors can work with their providers to see what changes need to be made. The impact of an individual campaign is evaluated and the results captured in the ESD. This assists planning for the next program.    


No matter what direction a plan sponsor’s retirement education program takes, it is important to work with providers as they develop an EPS and EDS. Achieving retirement readiness is a common goal shared by providers, sponsors and participants. Evaluating and focusing on plan education is an important pathway to help plan sponsor reach this resolution in the New Year.   


Mary Kay Leydon, Director of Participant Communication and Education, Retirement Plan Services, Lincoln Financial Group     

Aaron Moore, Managing Director of Participant Engagement, Retirement Plan Services, Lincoln Financial Group  


NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.