Moving the Needle with Participant Education

October 28, 2013 ( – Automatic plan features, including do-it-for-me investments, have helped defined contribution (DC) plan participants.

However, they have also replaced human interaction in some cases, and survey after survey shows DC plan participants want face-to-face communication and education, noted Rick Rodgers, co-founder of and principal at InSight EBC (Employee Benefits Communications), speaking to attendees of the American Society of Pension Professionals & Actuaries (ASPPA) Annual Conference in National Harbor, Maryland. Rodgers contended plan sponsors should approach participant education in the same way they do selection and monitoring of investments.

He suggested plan sponsors create an education policy statement (EPS), which includes broad education objectives, such as “improve retirement readiness” or “create informed investors,” and establish benchmarks for what it means to meet those objectives. Actual education efforts should be driven by an annual education plan (AEP), according to Rodgers.

An AEP is created annually and includes a demographic analysis that may reveal issues, such as younger employees are not participating in the DC plan or older employees have not saved enough, he explained. Goals should be defined—i.e., increase participation—as well as strategies and their frequencies, such as annual one-on-one meetings or quarterly e-mail campaigns. The AEP should also define staff roles and responsibilities, and how progress will be monitored.

Sometimes an employer has to deliver a difficult message to retirement plan participants, such as eliminating match. Rodgers suggested employers run a proactive educational campaign when changes need to be made, to avoid gossip among employees. “Run it like a PR campaign,” he said, noting that for large companies, this may even mean using local media.

State difficult messages simply and clearly, Rodgers continued, explain how it happened or why, offer the alternative solution and explain how the solution will fix the problem.

Sarah Simoneaux, founding partner of Simoneaux & Stroud Consulting Services, added that “the brain can’t deal with logic until anger and frustration are put aside.” Plan sponsors or advisers should stay calm when delivering difficult messages and give participants permission to be upset—i.e., saying, “You have every right to be upset.” Simoneaux suggested taking responsibility and not placing blame, but explaining what the plan sponsor can do, as well as what the participant can do to make things better.

Rodgers concluded that successful presentations/education meetings should have a deliberate agenda structure. The message should be understandable and the presenter should use analogies to make it understandable as well as humor to make it fun for participants. The presenter should also be intuitive and knowledgeable, knowing what not to say as well as what to say. “Employees should feel enlightened and that the time was well spent,” he said.

“If you can tell a story to illustrate a concept, you will always engage,” Simoneaux added.

Simoneaux suggested plan sponsors or advisers ask participants how they want to be communicated with or cover all bases—written, technology, face-to-face, etc. She noted there are three dimensions of communication—body language, tone and words—and, in meetings or face-to-face communications, all should be used to make the message positive.