By Mark Olsen, Managing Director at PlanPILOT
Although participation rates in company-sponsored retirement plans continue to slowly increase, the pressure on employers to encourage and increase participation remains. Recent reports indicate an astonishing 83% of surveyed employees have regrets about retirement plan decisions they’ve made, 41% plan to work longer than expected, and 83% also plan to work after career retirement.
It might be surmised that a significant cause of this worker angst is the current investment environment. In truth, however, this lack of “retirement readiness” has been building for some time, even during periods of favorable market returns. As we discuss often at PlanPILOT, designing and building a solid retirement plan for your employees is one thing; getting them to engage and fully participate is another. For employer-sponsored retirement plans, it’s not simply a “Field of Retirement Dreams,” where if you just build it, they will come. Here are our top strategies to encourage employees to maximize their benefits.
Why Employee Communication Matters
Communication with your employees is critical to fostering a productive, satisfied workforce where employees feel secure in their jobs and appreciated. Secondly and especially in today’s investment, economic, and employment environment, workers may be uncertain and anxious about how current events may impact their retirement in the future. They may therefore be more likely to turn toward their employer for guidance and options.
Create an Effective Communication Plan
Participation and effectiveness tends to increase when workers feel a sense of ease in understanding how their retirement plan works and is accessed, the short-term and longer-term benefits of participation and if these features are communicated in simple terms that can be readily understood and acted upon.
This includes a year-round calendar of notices and encouragement, repeated reminders of important deadlines (including those for enrollment and tax filing), and announcements of special events well in advance, such as educational live workshops or coming webinars.
Implement Multiple Communication Channels
Employers need to remember that their workforce could be made up of diverse demographics who prefer or use contrasting channels of communication. While younger employees may be amenable to text or email messaging, older workers may prefer literature or other forms of communication, such as live meetings, webinars, or one-on-one discussions with HR staff.
In addition, the changing nature of the workplace requires multiple avenues for employees to receive and access retirement benefit information. Remote work and non-traditional working hours are here to stay for many companies and industries, so in-house live workshops or a trip to the HR department, for example, may not be effective for these employees.
Understand Your Workforce
Recognize diverse levels of financial literacy: Customize your communication about your retirement plan to accommodate varied levels of understanding about money matters
Tailor communications and education for different financial situations: Your senior leadership team has different financial needs and understanding than your other employees. Accommodate these needs with appropriate levels of discussion and description about their benefits to maximize relevance and engagement.
Best Practices for Effective Communications and Participation
Use simple and inclusive language: Retirement benefits can be complex, especially to new hires or those without financial education or experience. Break down complicated concepts, avoid the use of “jargon” and technical terms. Use simple examples and language, and be mindful of potential cultural differences and language barriers.
Provide multiple platforms to explain programs and benefits: Implement email, intranet, and mobile apps for easy access by those who are comfortable with technology. At the same time, provide physical literature, such as brochures, newsletters, and public notices in the workplace for those who may not have access or are uncomfortable with such technology, including face-face or virtual meetings with knowledgeable HR staff or other experts for those who prefer the human touch.
Offer various financial education and workshops: Create education programs that not only explain the details of plan benefits and how to maximize them, but also on how to enroll, make choices among the myriad of options and best practices of monitoring plan accounts. Encourage questions and hold special relevant and topical events that enhance employee financial education. Such topics could include discussions on account allocation, maximizing health plans for every stage in life, how to pay for college costs, debt counseling, and effective tax or estate planning.
Utilize alternative presentation methods: Use infographics, charts, videos, and active character illustrations and examples to make complex concepts easier to understand. Have experts discuss real-life experiences and share stories that explain and illustrate the impact of active retirement planning (or the lack of it).
Include employee mentors and ambassadors: Select and train leaders within the workforce who can not only assist in guiding and encouraging participation amongst their fellow workers, but who could also function as ambassadors for them, communicating with management about worker needs and upgrades that may be effective in addressing needs and improve enrollment within the plan.
Encourage feedback and carefully monitor participation: Measure the effectiveness of your communication programs by encouraging feedback from participants. What are they excited about or what is missing that would enhance your plan? Conduct surveys and interviews to glean feedback about what is effective and working, and what isn’t. Make both verbal and written surveys open-ended to allow workers to express themselves, rather than simply choosing numbers on a grade spectrum or the often ineffective “always, sometimes, never” answer choices.
Utilize Expertise to Design an Effective Plan and Promote It
PlanPILOT is uniquely positioned to help employers customize and design retirement benefit plans that meet your needs and objectives. Our mission is to deliver comprehensive advisory services that help plan sponsors meet and exceed their fiduciary responsibilities by providing the proper risk management solutions and independent advice they need and deserve.
Are you ready to upgrade to a new standard for your benefit planning? Reach out to me at (312) 973-4913 or send an email to mark.olsen@PlanPILOT.com to learn more about how we can customize our services and your plan to fit your unique needs.
About Mark
Mark Olsen is the managing director at PlanPILOT, an independent retirement plan consulting firm headquartered in Chicago. PlanPILOT delivers comprehensive retirement plan advisory services to 401(k), 403(b), and 457 plan sponsors. His specialties include plan governance, investment searches, investment monitoring, and plan oversight. Mark is recognized as a leader in the industry and speaks at national conferences, including those organized by Pensions & Investments, and CUPA-HR.