Methods of Messaging

Alison Cooke MintzerAfter the passage of the Pension Protection Act of 2006 (PPA), there were often comments about how automatic enrollment, automatic escalation and qualified default investment alternatives (QDIAs) would eliminate the need to engage participants. In some ways, you can understand that assumption—after all, the whole point of such programs was to take advantage of participant inertia. If participants weren’t engaged enough to elect to enroll in the plan, what was the point of trying to engage them afterwards?

However, while participants may be on the right track if they stick with an automated plan, it turns out engagement and education are still quite popular discussion topics among plan sponsors, advisers and providers. In fact, at one of our Plan Sponsor Confidential sessions at this year’s PLANSPONSOR National Conference (PSNC), one of the challenges cited by multiple large-plan sponsors in attendance was how to connect with plan participants, including those in automated programs, and engage them in their plan in such a way as to prevent negative behaviors—taking loans, distributions or hardship withdrawals, etc. Similar conversations took place at the PLANADVISER National Conference (PANC) in September.

Interestingly, recent research shows that participants who are automatically programmed into their plan are actually more responsive to outreach from the provider or adviser than those who aren’t in the plan. As to the delivery of education, most advisers surveyed at PANC continue to use traditional classroom-style education for their meetings. However, the majority would also agree there are better methods for getting results. If you know participants will be somewhat apt to respond to your communication, it becomes imperative to deliver that message in the right way.

For companies with a largely desk-based employee base, sending such communications from the corporate human resources (HR) group to a corporate email address seems to make the most sense. However, desk-based employees are probably the easy group. Many workers are nowhere near a computer—or a desk—at any point during the work day or week. How do you connect with them?

Well, employees and plan participants do have access to mobile phones, and while there is a step required to gather the phone numbers, leveraging that delivery method is something the industry should continue to develop.

Mobile communication has to adhere to the U.S. Navy KISS principle: “Keep it simple, stupid.” Part of the reason traditional education failed is that it tried to engage participants in complex topics. You should keep the new communication and messaging simple, confined to: remaining in the plan, financial wellness messages, invitations to meetings, and links to information on the provider or adviser website, etc.

As an adviser, you might not want to actually be delivering retirement plan education, but you can leverage the provider resources or outside companies that specialize in such education or mobile technology. Further, helping a plan sponsor craft the right messages or methods of delivery can be a part of your value proposition, especially if such initiatives improve those outcome-based metrics—keeping people in the plan, limiting loans and withdrawals, and increasing deferrals.