Simplifying DC plan enrolment should begin by eliminating the “tyranny of choice,” making it easier for plan members to just get started, according to Tom Reid, senior vice-president of group retirement services at Sun Life Financial.
“We’re not saying choice is bad, but at certain moments choice is really not the most welcome thing and it’s not the thing that makes it easy for plan members to get into the plan,” he said, during a session at Benefits Canada’s 2019 DC Plan Summit in Banff, Alta. in February.
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Once plan members are enrolled, it’s important to keep them engaged throughout the journey, said Reid, including nudges from a tool like a virtual assistant to encourage better behaviours, such as contributing the maximum amount.
“We’re really just scratching the surface on this. This is artificial intelligence-based technology with data and analytics behind it, but it’s making a dramatic impact in terms of plan members actually looking at what you’re sending them, responding to all the work you’re doing as plan sponsors and helping get your plan members to a better outcome.”
Another focus is re-enrolment, said Reid. “One of the things we do around re-enrolment is, we asked them, ‘You’re defaulted into the target-date fund. Are you still happy with that? You can change it.’ And the beauty of that from a plan sponsor perspective, I think, is it helps you be more comfortable with your fiduciary obligation because you don’t want a plan member just checking in at enrolment and then never touching base ever again in their journey.
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“These are pretty simple things. All of these tools are available now to dramatically improve retirement outcomes for the millions of Canadians that we’re helping save for retirement.”
Read more coverage from the 2019 DC Plan Summit.