There aren’t many different ways a retirement plan provider can say it processes transactions promptly and makes sure participants have correct information, but a provider can differentiate itself by what it offers for participant communications, according to Cynthia Hayes, president of Oculus Partners.
In a webcast sponsored by communications provider Broadridge, Hayes noted that plan communications is one of the largest areas of expenditure for plan providers and plan sponsors. It is one of the fastest-changing areas in retirement plan administration, as technology and participants change, so it requires long-term investing of money and resources.
Plan sponsors wanting to step up participant communications should make sure their providers are in tune with the latest trends. According to Hayes, some of the big trends currently include:
- Segmentation strategies – Providers are getting more personal about segmentation, not just looking at age and gender, but how participants are engaging with the plan.
- Data integration and management – Providers are leveraging their data about participants for targeted communications and to produce reliable metrics for plan/participant success.
- Channel optimization – Providers are using all channels of communication (call centers, Internet, email and mobile communications) to meet the diverse needs of all participant audiences. The use of all channels provides a constant redressing of issues and reinforcement of messages over all channels.
- Metrics – Providers are using data to show the return on communications investment, i.e. how successfully communications have changed participant behavior and outcomes.
Tim Slavin, senior vice president at Broadridge, responsible for Broadridge’s defined contribution business, says the approach providers take is shifting from, “Here’s our number, call us when you need us,” to looking at plan metrics and reaching out to plan sponsors to offer solutions. Hayes adds that historically, providers had to ask permission from plan sponsors to communicate a message to employees. Now providers should get pre-approval from plan sponsors to communicate with employees as appropriate.
Hayes says advisers can also add value with communications. While advisers traditionally have held on-site meetings for plan sponsors, she is increasingly seeing them offer their own Web and digital tools to communicate with participants. Adviser can help plan sponsors by making sure providers deliver on communications promises, and they can collaborate with providers to develop communications plans to present to plan sponsors.
According to Hayes, tools to help participants track progress are helping to overcome participant inertia and improve plan success without adding costs for plan sponsors. Slavin adds that using data to help participants track progress is an increasing trend, facilitated by the use of data on recordkeeping platforms.
Finally, Hayes notes that financial wellness is becoming a more dominant communications topic, and plan sponsors are increasingly offering it as a companion to physical wellness initiatives. “This ups the game for providers, and we see it as a tremendous area of change over the next 12 months,” she says.