They aren’t sexy and you won’t find them on the program at the next big pension conference, but the option forms you provide plan members when they leave or retire are, perhaps, the single most important piece of communication you’ll ever give them.

Of course, we’ve all seen our share of bad forms—forms written in legalese, forms that use six point type, and forms that don’t leave enough space to write your address. But these aren’t the big issues. The real concern arises when the forms you use mislead your members, whether deliberately or not, or have a built-in bias toward a certain course of action.

You can do everything right in terms of equipping members to make informed decisions—offering comprehensive education sessions, providing online access to retirement planning tools, and offering access to qualified, independent financial planners. But it’s all for nothing if the member misinterprets the options when the time comes to sign off on an irreversible pension decision.

An underrated art
Designing user-friendly, legally compliant forms is an art. It begins with an intimate understanding of the unique provisions of your plan, as well as an up-to-date knowledge of pension, privacy and tax law. Forms must not only use plain language, they need to use wording that is consistent with the language you have adopted in your other communication materials, such as your plan booklet, statements and website. The only sure way to know if your forms are up to snuff is to test them on a representative group of plan members.

Hold your recordkeeper to account
If you have a defined contribution (DC) plan, don’t assume the forms provided by your record keeper are fine “as is.” Just because your provider tells you their communications materials comply with the Guidelines for Capital Accumulation Plans, it doesn’t mean their forms are designed to meet your members’ needs. Remember, the DC provider’s goal is to retain assets under administration—long after your members leave the plan. With that in mind, you need to review the forms to make sure they clearly reflect the full range of available options.

For example, if your members have the option to buy an annuity, does your form explicitly state that the member can buy that annuity from any Canadian life insurance company, or does it simply provide a checkbox to buy an annuity from the current provider? Do your members understand that annuity rates can vary widely from one company to another and that it pays to shop around? And, is it clear whether group discounts will continue to apply if a member chooses to keep his or her account with the record keeper, rather than transfer it out?

Providing first class forms is more than just a nice thing to do. Well-crafted forms will help streamline administration, reduce error, minimize your liability, and strengthen risk management.