For employers that sponsor group retirement plans, the puzzle of how to get employees to make the most of their plans continues to be pieced together. If employers have yet to meet that goal, it hasn’t been for lack of trying. Education, promotions, contests—there’s little that hasn’t been tried to pique interest and increase active participation among plan members.
That said, employers are making inroads. They recognize that their employee populations aren’t homogenous. They’re tailoring information, information delivery and sometimes plan design based on the different needs of employee groups. And while they’re reviewing studies and trends, some are going right to the source—their employee groups—for additional insight.
A retirement program offering doesn’t come with a guarantee that employees will choose to participate, so the effort to build understanding and engagement is vital. And with governments and the media continuing to focus on Canadians’ lack of retirement savings—plus high levels of household debt—the timing may be right for employees to finally sit up and take notice of their available workplace plans.
Getting younger employees to pay attention early in their careers to what their eventual retirement needs may be can help them avoid the retirement savings shortfall that generations set to retire over the next few years may face. At the opposite end, employees approaching retirement need different information and support to play catch-up, and to assess their options and prepare effectively.
Gen Y
For employees in the generation Y band (those born in the ’80s and ’90s), some employers and carriers are finding technology helpful. For this wired generation that lives life online, tablets and smartphones can support online enrollment right at education sessions. Offering immediate access to a secure facility using smart technology can help to offset member inertia.
Tailoring plan design can work, too. Enrolling new employees automatically—immediately as they join the firm—takes the guesswork and effort out of plan entry, particularly for younger staff members who view retirement as a distant event.
In the experience of one large employer, putting employees on the best possible footing is proving effective. New staff members are enrolled into the pension plan, with target date funds as the default option, at the maximum contribution level. Employees are told they can make changes—reducing contribution amounts or opting out entirely—and have the flexibility to do so online at any time.
Employees have access to education—online, via webcast and in person—along with retirement income estimates and resources such as retirement calculators. Introductory modules—aimed specifically at younger members—enjoy strong take-up rates. The employer continues to monitor use among all its employees and is surveying them on how they want to receive information.
The experience of another large employer—with a markedly different employee population—suggests this strategy may have wider application. In a recent survey of staff members, more than half of respondents expressed a preference for not having to make an investment selection and being placed into a good default option.
Baby boomers
At the other end of the scale, boomers (born in the ’50s and ’60s) have distinctly different concerns. As members of this group are actively preparing for retirement, the strategy best suited to their needs has to include resources to support their decision-making process in conjunction with more personal support. Group sessions and presentations may fit the bill for starting the planning process, but, ultimately, an option where it’s possible for these employees to discuss personal circumstances in some detail is ideal.
While boomer employees articulate a desire for in-person sessions, web and online options get strong support as well. Employees responding to one employer’s survey indicated that time constraints prevented them from scheduling attendance at the in-person sessions. They highlighted online as a logical way to access information conveniently while the detail was still timely. In another instance, an online survey polling employees about in-person, web and email options found email was the respondents’ most popular choice.
Between the new entrants and those preparing to move into retirement, a significant, and varied, population exists. Among this group, the age demographic may be less of a consideration than the group’s level of interest and retirement savings behaviour. News on, or in conjunction with, statements may prove central for this group. Particularly where it’s possible to provide group members with a sense of their outcome (ideally some form of estimate), getting a sense of what they’re building can make their outcome a more concrete concept.
Providers typically offer regular reports (e.g., on participation rates or investment selection trends) that can be helpful. Plus, employers can access a provider’s volume of specific resources or services. Those insights can be used to shape offerings for these employees.
More guidelines
Tailoring information to age and areas of immediate interest fits into an effective engagement strategy, but age is only one factor that employers need to consider. For every demographic band on the spectrum, the following guidelines may be useful.
Go to the source. Simple surveys can offer a wealth of insights. For an employer seeking to understand what works and what doesn’t, even a brief questionnaire can provide useful perspective. Retirement service providers can help, and some routinely collect data for their own use in developing and adapting options for clients.
Providers frequently ask employers and employees to assess available education resources and to suggest related program ideas. Most providers are willing to share this data with clients. Aggregated results can give a particular employer a sense of how the results compare with other firms’ experiences.
Certain retirement themes recur, regardless of employee age, function and location. While some employees speak to information being too complex, others view the same information as being too simple. Modular delivery—in person, via the web or on a site—allows for increased flexibility that streamlines information to suit groups with differing interests.
This kind of tailoring isn’t necessarily costly. Many providers already offer resources of this type, and most are prepared to work with employers to adapt materials and messages to achieve effective targeting.
Survey questions will identify major trends, but offering respondents the opportunity to offer comments is equally important as individual observations can identify gaps or opportunities that may not be evident initially. One employer with a strong focus on providing education was surprised when respondents to an initial survey indicated that basic plan design features weren’t clear. Armed with details provided in the comments, the employer and provider built a solution to include that key element into its education plans. Taking that action also told employees that their insights were heard and applied.
Build a body of knowledge. Over time, collecting employees’ perspectives—including measurement of what information they use and remember—can support effective targeting. Particularly where respondents’ demographic information (age, location, length of service) is collected, the detail can help to track the evolution of employees’ needs and interests, and can signal when the employer and provider need to rework or re-engage education and promotion. Combined with detail available in plan reports, survey data can provide valuable perspectives about areas that require attention or are already working effectively.
Encourage questions and track topics. Presentations—in person or online—offer a good starting point for the sharing of plan information. But offering an easy way for employees to make inquiries when subjects are on their mind can help employers identify areas that can benefit from additional education or promotion. In between more formal surveys, brief updates polling employees via web and email may prove helpful. Similarly, reminders about plan features can keep the program in focus.
Small, specific messages may be more effective. Employees who don’t have time to attend a session likely don’t have time for a long document or presentation. Focusing on a single element—eligibility for a match, a bonus period, a new resource, for example—saves employees from having to dig for detail. Where a brief message can be targeted to eligible employees and timed effectively, it’s more likely to resonate with the recipient. If this type of approach is sustained, intended recipients will learn that messages they receive apply to them personally and so require attention. Employees who aren’t part of a target group won’t be frustrated by information they can’t use.
Brief messages suit delivery options such as emails or tweets and can be equally effective with traditional media. Where details aren’t time-sensitive, these promotions also suit traditional media such as postcards, which can prove effective for an employee group whose members work remotely or travel.
Promote good news. Key features and valuable options may not be obvious to every employee who participates in a plan. A fee reduction, a new service option, a fund or fund class may be news to some employees. Highlighting benefits can help to reinforce the value of the plan and build awareness without requiring employees to take action.
Build on the wins. One employer with an active approach to education was disappointed when an initial survey revealed that employees didn’t understand the statements, so they weren’t reading or remembering key information. A presentation focused solely on statement details was included in the next year’s education plan. During the next survey, more than 80% of respondents confirmed they recalled reading their statements. Now, knowing that the statements offer a dependable connection to employees, the employer uses statement inserts to highlight items of interest.
With economists and governments articulating a growing need to promote retirement savings as part of an effort to boost financial literacy, employer-sponsored plans are getting regular promotions outside of the workplace. With diverse employee populations whose needs and interests vary, no one-size-fits-all solution will suit everyone. Offering broad options delivered with different media—and taking a cue from employees themselves—can help employers mount an effective approach.
Virginia Alderman is director, communications, group retirement solutions, with Manulife Financial. virginia_alderman@manulife.com