PSNC 2016: Best Practices in Participant Communication

Participant education and communication must be part of a plan sponsor’s culture to get participants engaged with the retirement plan.

Content that is short, concise and addresses the issue at hand is best for participant communications, according to Kara W. Tedesco, principal and employee benefits consultant with Milliman.

Speaking at the 2016 PLANSPONSOR National Conference, Tedesco warned plan sponsors not to use flowery, descriptive fillers. “Plan sponsors should know the proper words to use for their participants,” she said. She gave an example of a client that was mapping to new funds, but one fund couldn’t map over. Milliman thought that saying the fund was locked out was too harsh, but the plan sponsor wanted that language to be used so participants would fully understand the consequences. “Communications should play on participants’ emotions in the proper way,” she stated.

Amy Haug, human resources director at DePauw University, a finalist for PLANSPONSOR’s 2016 Plan Sponsor of the Year Award in the 403(b) category, added that communications to participants must explain the call to action. “Employees suffer from email and communications overload, so they are not offended by directness,” she said, adding that language should be customized to the culture of the workforce, and plan sponsors should take provider materials and customize them as if they are coming from HR.

Haug told attendees DePauw uses a tiered approach to education and communication that suits all preferences, including email from HR, follow ups from specific persons, large meetings and podcast and YouTube video links via email. All communication references a web site where people can find more information if they want.

Tedesco warned that if participants do not know from where the email is coming, they may pass it over. She suggests emails coming from the plan sponsor are better than from the plan provider. In addition, one-on-one meetings are highly effective.

Haug said DePauw has an onsite provider representative, and employees are encouraged to meet with him once a month. They know him.

As for targeted communications, Tedesco has found this is not very effective when it comes to sending communication to low savers, non-savers or those improperly diversified. “We haven’t had much luck with participants responding.” However, she is not talking about other targeted communications, such as to women or those nearing retirement.

According to Tedesco, to get participants more engaged with the plan, communications need to be part of the sponsor’s culture. She suggested setting an education policy statement. “If you don’t make education a regular part of your culture, employees may feel they cannot save or don’t know how the retirement plan works,” she concludes.