As the workforce becomes more diverse and technologically savvy, retirement plan sponsors should focus on providing customized education, retirement readiness tools, situational guidance, and “next best step” trigger events to help employees prepare more effectively for retirement, a recent report by Broadridge Financial Solutions has recommended.
Released on June 7, the report, “Transforming the Participant Experience: Innovative Strategies for Improving Outcomes,” observed that converging trends—such as changing workplace demographics, technological innovations, evolving participant demands, increasing margin pressure, low savings rates, and added regulatory scrutiny—are creating challenges and opportunities for new solutions to improve participant experience. Pointing out that millennials are expected to make up more than 50% of the global workforce by 2020, researchers warned that plan providers should be prepared to cater to an increasingly diverse audience, many of whom are “digital natives.”
According to the report, growing numbers of plan sponsors are seeking to transform their participant engagement strategies by leveraging data analytics, participant preferences, and multimedia campaigns to create targeted communications. The authors noted that sponsors are increasingly moving away from legacy platforms that rely heavily on custom coding to modify campaigns and compliance communications, and are instead turning to cloud-based technologies that allow managers to streamline content and easily make changes across multiple communication channels, including digital, mobile, and print.
The report cited research showing, for example, that retirement plan participation can be raised 30% by effectively delivering personalized communication through multiple channels; and that an omni-channel approach of digital, print, and personalization strategies can save between 10% and 20% in annual communication costs.
In addition, the report recommended simplifying print materials to ensure that communications are focused on key points, and using online microsites and opt-out programs aimed at retirement plan participants to reduce the need for call center support.
Another important trend identified in the report is the increasing frequency of plan and regulatory changes, which put pressure on plan sponsors to respond quickly to new requirements and plan updates. The authors suggested that automated content solutions can help eliminate the need to constantly create and manage one-off changes, making it possible to issue targeted communications with speed and precision.
Noting that 45% of working American households have no retirement assets at all, and that the retirement savings gap in the U.S. is an estimated $7 trillion, the authors further advised plan sponsors to place greater emphasis on reducing the retirement savings gap. To address the challenges associated with employees who decline to participate in retirement plans and older employees who may be thinking of putting off retirement, researchers recommended developing programs that outline the options for and the drawdown phases of retirement.
From Benefit Trends Newsletter, Volume 60, Issue 8
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