With each effort to engage retirement plan participants, plan sponsors should ask, “What is it we’re trying to communicate; do we have a clear call to action; what do we want to measure; and to what end?” says Elizabeth A. Piper, participant experience manager at Wells Fargo Institutional.
Plan sponsors have access to all kinds of participant data to help them see where they stand, Piper told attendees of the 44th Annual Retirement & Benefits Management Seminar, hosted by the Darla Moore School of Business at the University of South Carolina, and co-sponsored by PLANSPONSOR. She said communications should include a next best step for participants, and plan sponsors should track participant actions.
Gap statements (how far participants are from where they should be) and retirement income projections let participants know where they stand. “If you pull in participants’ assets outside the plan, Wells Fargo has seen double digit action rates,” Piper said. She added that a good foundation for deciding what to communicate is deciding how to define success for the plan and participants.
According to Piper, what really moves the needle for success is:
- Financial wellness programs – Money matters, financial matters are a significant worry for most people. If plan sponsors can help participants holistically with financial matters, it may help them find money to save for retirement, Piper said.
- A plan for retirement – People who know how much they need to have saved, save four times as much.
- Relevant and personal communications – Tell participants what relates to them—communication should be based on age, life stage and circumstances.
- Conversations – “Everyone wants to sit down and talk,” Piper said. “Whether it’s with a call center rep, HR staff or adviser.”
Piper shared some stats showing that growth of print communication is flat, email is steadily trending, phone communication is trending down, social media is spiking, in-person communication is also trending up and videos are one of fastest growing types of communications.
Communications should focus on the right things:
- The right time – Piper suggested plan sponsors communicate at times participants are most likely to act. For example, upon hire, at life stage changes, tax time (to encourage them to put at least some of their refund in savings), when they take a plan loan, or after they attend an education meeting. “Grab people when they are thinking about financial matters,” she said.
- The right approach – Plan sponsors should move beyond print and take advantage of new technology. “Billions of videos are viewed on Facebook every day,” Piper noted.
- The right expertise – Education materials, videos and meetings should use someone participants will revere as having expertise.
- The right message – Nudge participants to enroll, increase savings, or diversify investments. “Plan sponsors should also consider each generation’s view,” Piper suggested.
Why should plan sponsors use social media? Piper shared stats from Social Media Energy that says 90% of consumers trust peer recommendations, but only 14% trust advertisements; the average user spends 15 minutes a day on YouTube; and social media is the No. 1 activity on the Internet.
Piper suggested that plan sponsors invest in a mobile enrollment capability. They can send an email, text or tweet on Twitter congratulating a participant on taking an action and suggesting a next step. For example, the message may say, “Congratulations on enrolling in the plan. Are you saving enough?” Plan sponsors can offer debt management or other financial education via blogs, YouTube videos, or videos or games on Facebook.“Plan sponsors should ask employees how they want to receive information,” Piper said.