My youngest child, who’s now 17 months old, is enjoying experimenting with language. At this stage of development, her ability to communicate is still in its simplest form: mostly common words such as mama, dada, ball and the perennial favourite of children everywhere, No!
What’s interesting to me, though, is that she’s already learned that words have the power to make things happen. More gets her more food, mama gets my attention, dance will make us turn on the music, and up means that an adult will pick her up. Simple words, simple actions.
As we grow older and our language evolves, it also becomes more complex and difficult to articulate. This is particularly true in the area of pensions and investments, where it can be difficult to decipher meaning. Of course, those who live and breathe investments can speak knowledgeably of alpha, smart beta and stochastic modelling…but mention even simpler concepts such as risk tolerance or investment time horizon to most people, and you’ll soon see their eyes start to glaze over.
Part of the issue may be that employers—understandably trying to avoid responsibility for employees’ lack of comprehension—can wind up sending out retirement plan communications that overcompensate by providing too much information. You can’t say I didn’t warn you. But for many employees, reading pension plan statements is like reading a foreign language.
Another challenge is that there’s often a disconnect between theory and practice, intention and action. The concept of saving for retirement makes sense to most people, but the specific call to action—What do I need to do today to ensure that I can retire successfully 20 years from now?—is often missing.
I’m not suggesting that the retirement industry should “dumb down” employee communications or underestimate employees’ intelligence. Nor do I think employers should risk potential liability by not including any wording that legislative guidelines and legal counsel may require. But we do need to talk to employees in plain, direct language that links ideas with actions, and actions with clearly understandable consequences.
Paradoxically, a “simple” communication strategy may actually require more work to get the messages right—especially since a one-size-fits-all approach to retirement planning is a non-starter. But it’s worth the extra time and effort, because we don’t need more complexity in the already-challenging language of pensions.
We just need results.
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