What they need, of course, is encouragement to make informed investment choices. Twenty-eight percent of assets in the company’s group registered retirement savings plan are in the default fund, which is a balanced fund. “That’s actually pretty good,” says Welch, “because some might have intentionally chosen to be there.” However, another group of employees has not made any selection and, therefore, has not moved their money.
So how is Welch helping them? Very informally. “You want to be precise in your facts, less formal in your delivery,” she says. “If you invite an employee out to a big investment meeting with some person in a suit, a lot of people look at that as a form of punishment.” And intimidating, to some extent.
Employee meetings are now brief and direct, and the focus is getting plan members to ask questions. That’s easy for those who work at the corporate office, but what about the members who work shifts in the hotels?
Four Seasons has implemented on-site mini meetings in its U.S. hotels and resorts. “[Presenters] go to the morning meeting on the floor before the housekeepers start their shift,” she says. “Or to the golf course shed for the groundskeepers.” The presenters introduce themselves, Welch says, and say something like, ‘I’m going to be in the cafeteria at lunch—why don’t you come chat?’ It’s very casual.
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And these mini meetings aren’t the only way that the Four Seasons engages employees. It uses targeted communications in its retirement packages and offers a complimentary one-time retirement planning session for all of its 50-plus members. It also provides a “gap analysis”—a personalized letter that identifies what the member is saving, what is in the plan and what he or she will need in the future.
But while Welch wants to make sure that members are making informed choices, she’s aware that not everyone will become engaged. With this realization, she wants to ensure that the default fund will generate sufficient retirement income for those unmotivated members. Although target date funds are relatively new on the market as an investment option, Four Seasons switched its default fund from a balanced fund to a target date fund for its U.S. employees in July 2007. “To little or no consternation of employees, actually,” says Welch.
However, the change was done after careful consideration. “We looked at our mix of employees and their ages and realized that if they’re defaulting, they’re not going to make a change,” she says. “In actual fact, in today’s market, probably a lot of them who are close to retirement are actually heaving a sigh of relief.”
And if the present financial crisis continues, let’s hope Welch continues to communicate to Four Seasons employees— for another 21 years.
Brooke Smith is associate editor of Benefits Canada. brooke.smith@rci.rogers.com
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