(PlanSponsor) - EMPLOYERS KNOW that merely holding yearly, quarterly or monthly onsite meetings to present a 401(k), other retirement plan or other benefits no longer suffices for getting workers to get the most from the retirement plan.
“The challenges are really participants reading [the communications], so our goal is to find ways that our associates will read the information, and [there are] different ways that we do that internally,” explains Gay Lynn Hearst, director of benefits and total rewards at Arvest Bank. “Voya [Financial], our retirement plan recordkeeper communicate[s] with associates directly either via snail mail, or email and then internally.”
There is no one optimal route to communicate with all company workers at once, and to reach everyone, employers need to communicate with workers on every platform, says Hearst.
Since the pandemic normalized virtual meetings, the setting for benefits and retirement education or communication meetings that had been held in-person and on-site are now almost supplemental to online events.
“We don’t have too many in-person meetings,” Hearst says. “That’s more of almost a quarterly thing. We do a lot of virtual meetings.”
There is evidence that many employees do not understand their retirement benefits well and that communication needs to improve, says Vidhi Sanders, vice president and head of participant outcomes at Capital Group.
“Despite how much education and wellness programs and resources that are out there, it really wasn’t resonating with most of the people that we talked to,” Sanders says. “We talked to people all over the country, [of] all different occupations, income levels, ethnicities, [and] most people can’t tell you what their retirement plan benefit is. Most people can’t tell you if they have a match. A lot of people can’t tell you if they’re enrolled or not.”
The upshot is that communication may need to start with the basics, including, “’You have a [retirement] plan, this is the plan design, this is what you get,’ and [saying] it in a way that resonates with people is No. 1, and then [reinforce] the why behind it,” advises Sanders. “For some people, the friction is, ‘I don’t know who my recordkeeper is, I don’t know what the website is, I don’t know my login.’”
One best practice is a bottom-up approach to communicating the retirement plan in a way that people from underserved communities or lower income jobs can understand and feel they have some opportunity and potential to retire with sufficient assets, according to Sanders.
Meet the Workers
The task of communicating with workers about their retirement benefits involves meeting individuals where they are, according to plan sponsor and communication sources.
As one example, Arvest has initiated the launch of a wellness program addressing non-retirement benefits, with on-demand resources to address workers’ physical and mental health and well-being. The program will include short videos on medical, dental, vision and mental health benefits and mental well-being resources accessible to workers through Arvest’s employee assistance program.
The regional bank, with branches in Arkansas, Kansas, Oklahoma and Missouri, plans to launch the program online this month so it can be accessed from anywhere by participants, with retirement resources and information for physical and mental health and finances.
“We’re not just benefits; it’s total rewards, and so we will be putting together little videos that people can access outside of the Arvest platform to watch with their spouses or their family so that they can make decisions at home in a personal way,” Hearst says.
Employers’ communication strategy must account for the circumstances from which the worker is coming, adds Christina Schell, a senior associate communications specialist at Arvest.
”We have associates across numerous states in a variety of positions—some are remote, some are working in a facility and they may or may not be at a desk [or] in front of a computer,” Schell says. “We’re making sure that when we’re creating a communication plan, we’re thinking about [these] things and coming up with a lot of different avenues of communicating that information so we can hit as many associates as possible.”
At Delta Air Lines, the varied employee population, demographics and age cohorts mean the employer uses several different communication techniques to engage, says Josh Jessup, Delta’s general manager for human resources.
“Our reservation employees or general office employees, for example, work at a desk and have great access to email, so that works well for them,” Jessup says. “Our flight attendants or airport customer service employees, on the other hand, we often have much more success with face-to-face communications.”
Delta Air Lines was named a 2022 Plan Sponsor of the year for corporate defined contribution plans with more than $1 billion in plan assets.
Timing is Everything
Providing communications on many different channels is important across the board, and so is offering content throughout the year and timing employer communications for when workers are the most receptive, Arvest’s Schell says.
Kristi Baker, managing partner for CSi Advisory Services, a division of Hub International, says engaging with employees multiple times is critical.
“[Employers] have to hit [workers] at the right time, [because a worker] could get an email today and be very distracted and not engage [with] the email about your 401(k), but maybe a month later, another communication comes to you, and it’s the right time [to engage, because now] you’ve got the time, the scope, the interest,” she says, citing the value of persistence.
Employers must remain committed to robust communications, persist with strategy and engage with workers multiple times, adds Baker.
At Arvest, after ensuring workers know there is a retirement plan benefit, the HR group conducts webinars with new hires to inform employees of the next most pressing item: to contribute at or above the threshold necessary to meet the employer’s matching contribution, says Laura Stroud, a benefit and total rewards analyst at Arvest.
“They go over all aspects of the plan with our new associates,” she says. “It’s very much stressed about the match.”
Arvest matches 100% of employee contributions up to 3% of salary, matching a further 0.5% for the fourth and fifth percent of the employee contribution, according to Hearst.
Arvest Bank was a 2022 Plan Sponsor of the Year award finalist, in the corporate defined contribution category, with between $250 million and $1 billion of assets.
Segmentation and Communication Best Practices
Employers’ retirement plan communication designs—the specific level of sophistication of the content—must reflect that their task is not to communicate only with high earners, workers already engaged in the retirement plan and workers who have investing knowledge, but to communicate with all benefit-eligible employees.
Arvest uses recordkeeper Voya Financial to segment the demographics and population by cohort. Sanders says Capital Group’s ICanRetire digital employee engagement platform performs segmenting for employers, as well.
“We segment people and message to them only what we think is going to be relevant to them, based on their demographics and their participation in the plan,” Sanders says. “We’re not going to tell someone who’s 50 and participating at a 3% [contribution rate] the same message that we would tell somebody that’s earlier in their career and is [contributing] at 0% or someone who’s 35 and [contributing] 8%, [because workers are] going to quickly delete if the headline is about catching up to their retirement when they’re 28 years old, or if a [message says,] ‘Hey, time is on your side,’ if I’m 50 [or] 55.”
CSi Advisory’s Baker says the advisory practice works with employers to segment their populations by age cohort and targets specific communications to early savers, mid-life savers and late savers for “what’s relevant to them,” Baker says. “We can either provide the communication to the HR department for them to distribute, or we can get authorization from the HR department to offload that responsibility from them.”
In August 2022, Capital Group published research that showed language resonated with investors more than images, while also showing some imagery and messages that employers want to avoid, such as finding that respondents preferred “supportive” scenes. For Baby Boomers, the well-received images show empowered older people who are actively engaged, enjoying themselves or being productive.
Field research conducted by Sanders’ team included speaking with workers about their retirement plan communications for Capital Group’s “I Can Retire” digital employee engagement platform. The findings were used to develop best practices for sponsors.
“[Number] 1: It’s just really overwhelming, [Number] 2: [Communications is provided] in a language [and] tone that goes way over people’s heads, and it’s only available at work during the 9-to-5 workday or through work channels—whether it’s an intranet site or through their HR department,” Capital Group’s Sanders says. “[Workers] don’t have access to it in the moment they would be [most] open to it, which is usually on their days off or before [and] after work at home, when they’re in that mindset.”
By Noah Zuss
February 1, 2023