1. Demographics
Very few groups are homogeneous. Just about everyone has tried to segment their employees into subgroups with more common interests to allow each segment to be addressed separately. Usually, the lines are drawn according to member age or “life stage.” For example, new hires at Bell Aliant get a comprehensive overview of the program to help new entrants take full advantage. Later seminars are targeted at employees in their fifth year and 10th year with the company and, finally, those in the pre-retirement stage. Each presentation highlights the content appropriate to the particular group. The introductory seminar, for instance, focuses on the program’s design and each player’s responsibilities, with tips on setting goals, basic investing and how to navigate the service provider’s website.
It’s not just the message that gets segmented; so does the medium. In Calgary, Trina Cook, manager of pension and benefits at Shell Canada, organizes special live onsite seminars and oneon- one meetings for employees close to retirement. For those just starting out, she is testing the effectiveness of webcasts and online information modules.
2. Geography
Garry Sudul, director of pensions and benefits at J. D. Irving, has employees dispersed across Eastern Canada. He is also experimenting with live webcasts to reach them. And he makes local managers accountable for attendance at their retirement seminars. This brings up a special challenge in multi-location businesses: the potential gap between head office(where HR policies are set) and the field(where the policies are implemented). It is typical of the retail and hospitality industries to have stores, restaurants and hotels spread over a wide geographic area. Karen Welch, director of compensation and benefits at Four Seasons Hotels & Resorts, knows that getting local people onside— and tapping into their unique knowledge and experience— can be key factors in success. By comparing results achieved at different locations, she is able to spot best practices in the regions and copy the successful tactics elsewhere. She also raises the priority of retirement campaigns by recognizing regional results and creating some friendly competition among those responsible for each location.
3. Shift Work
Time can be as much a challenge as location. Casinos, for example, operate on a 24-hour schedule and the usual lunch and learn can’t possibly reach everyone. At Casino Windsor, Vince Marcotte, director, human resources, has seen a single day of conventional seminars evolve into a full week of round-the-clock activities to meet employee needs. During “Pension Week,” staff from the service provider are on hand to answer questions from employees before they go on and after they come off shift.
4. Technology
Ron Sawatzky, director of pension and benefits at Enbridge in Calgary, uses “push” emails to keep the retirement program in front of his plan members. Every few weeks a short message is sent out on a topic of interest with a link to a web page. “I like having the ability to track the number of hits, so I know for sure if I am getting through,” says Sawatzky. “We’ve reached the point where we’re now getting demand to go from ‘Pensions 101’ to the ‘201’ level.” What do you do when employees aren’t sitting at a desk with a PC? At Casino Windsor’s Pension Week, computers are available at onsite kiosks where employees can log on to see their accounts, discuss their concerns with an expert and make changes on the spot.
5. Advice
As Larry Ketchabaw, manager, pension and benefits at Unisource, tells it, “Employees will actually say, ‘I know you can’t tell me what to do, but what should I do?’ They know we aren’t licensed to give advice, but they trust us.” This Catch-22 situation sensitizes plan sponsors to their employees’ needs while at the same time preventing them from fully addressing them. As Jessie Teolis, manager of compensation and benefits at Ericsson Canada in Montreal, puts it, “I tell them, ‘There are experts out there. I am not the expert.’”
These sponsors are tuned in to the reality that there are limits to what an employer can and should do. Advicegiving is a regulated activity that requires licences, consumer protection—and lots of time to gather the personal financial information on which individual advice is based. Remember, you may have a dental plan for your employees, but you don’t tell them what procedures they should have done. The advice to employers is clear: don’t give advice.
6. Complexity
At a time when most plan members aren’t even sure what kind of plan they are in, many sponsors struggle with legacy plans. The fact is, it may not be in your power to change the grandfathered 1% non-contributory Final Average Earnings defined benefit(DB)plan. As a result, you’d be wise to concentrate on areas where you can cut the complexity.
Simplifying the menu of investment choices can result in easier communications on one of the more sensitive issues. Of course, you should expect some short-term resistance. When Ericsson cut its menu in half, reducing from more than 50 options, some employees objected. But that quickly passed, says Teolis. “There will always be employees who want a hundred funds, but we also heard from members who told us after the change, ‘This is better.’” The same story emerged at Bell Aliant, where the menu was cut from 14 to eight. In fact, the extensive communications that come with any significant plan change help to get attention. As Laurie Creelman, senior pension consultant at Bell Aliant in Halifax says, “People sit up and notice when there’s a change.”
7. Trust
Consumer marketing paints a picture of Canadians looking for free advice, seeking second opinions, seemingly never trusting one source. Since financial planning isn’t taught in high school, it’s natural to want to talk to an expert. Equally, Canadians recognize that, one way or another, most experts are selling products to them—and earning a living from the decisions consumers make.
This context puts the employer— whose primary goal is employee satisfaction— in a unique position of trust. Cook states it plainly: “We take the responsibility to educate seriously. It’s the right thing to do.” That’s why Shell Canada chose a third-party pension counsellor for the one-on-one meetings it arranges for members approaching retirement.
Education from an unbiased, independent source can also bridge the gap. It seems that a third-party expert can go beyond narrow plan issues and tackle broader life questions— and answer with information that is trusted. Money is a highly personal topic, and when there’s no worry about a hidden sales pitch, employees feel more comfortable opening up. That’s why Ketchabaw at Unisource supplements the information and seminars he gets from his service provider with workshops and eLearning from a fully independent educator. His employees are reassured by the fact that “the only thing they are selling you is knowledge.”
8. Lack of Knowledge
To call lack of knowledge an obstacle to education sounds strange. After all, isn’t the basic premise of any communication and education strategy that the students don’t know the subject? But employees forget things, don’t open that email, miss presentations, don’t look at the bulletin board or fail to read that important statement. So what’s the solution? Be consistent and repeat the message at different times and in different ways. Year by year, as he’s repeated his Pension Week at Casino Windsor, Marcotte has noted a growing interest. It may well be that repetition is getting the message through, but Marcotte also suspects that the passing years are sensitizing employees to the approach of retirement. “We’re a young company and it’s only now that we have a sizable number of employees in the preretirement stage.” Sounds like the old adage is true: When the student is ready, the teacher will appear.
9. Irrelevance
We all know it’s hard for a young worker to focus on preparing for retirement when it’s such an abstract and far-off concept. Why not change the subject to something more relevant? Welch has had success by offering younger employees sessions that focus on how to manage their cash. The same challenge can exist with members of DB plans. As Terri Troy, chief executive officer of The Halifax Regional Municipality Pension Plan, says, “By listening closely to our members, we found that they regarded the regular retirement newsletter they received as too general. In response, we came up with a new annual report that more directly addressed their key questions.”
10. Indifference
Time spent arranging even the best presentation is wasted if no one attends. Many ways to fill the room have been tried. At Casino Windsor, Marcotte uses multiple approaches to cut through the clutter and noise of competing messages. For one thing, he uses the company’s CasinoVision, an in-house TV channel, to advertise its week-long pension plan blitz.
Traditionally, most plan sponsors have dangled free food in front of hungry employees to increase attendance at the classic lunch and learn. But incentives can be more imaginative than that. Teolis at Ericsson has increased attendance by offering door prizes. There’s no panacea, but holding events on company premises and on company time tend to help. Some sponsors even make attendance mandatory.
At Four Seasons, Welch has discovered different practices across the network. In one hotel, she found that the local benefits manager was not content to wait for employees to trickle into the retirement seminar. “He actually went out to the garage where the golf course employees gather before their shift and gave them an impromptu preview of the presentation. By talking up the event, he was able to attract a much bigger—and more receptive—audience.”
Advertisers—and savvy plan sponsors— know that, after awhile, even the most compelling messages can get stale. Accordingly, they mix it up, changing emphasis and using different messages at different times. For example, it sometimes seems as if the employees’ entire financial security revolves around the company’s retirement plan. This can play into the false impression some employees have—“I’m covered, I’m in the pension plan”—especially if they have never actually read a statement or booklet from start to finish! Broadening communications to include a little bit about what else is “out there” can get a constructive conversation started. At the minimum, employees should know retirement is about a three-legged stool, which includes the individual’s own savings as well as government plans.
The education challenge remains both urgent and important, and the obstacles aren’t going to go away. In the end, there’s no magic bullet that will do the job. As Irving’s Sudul puts it, “One thing that doesn’t work is ‘one thing.’ It’s important to do more than just ‘one thing.’” Similarly, Ketchabaw asserts, “You can’t rely on just one medium.”
The bottom line is that the plan you sponsor is yours. You can choose the education and communication strategies that fit your goals. Always remember that you are not alone. Find other sponsors with similar objectives and share ideas. Listen to your plan members and reach out to them with information on what matters most to them from sources they can trust. Ultimately, they will thank you.
Christopher Cartwright is an independent consultant based in Montreal. christopher.cartwright@hotmail.com
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