How to Plan, Craft Successful Participant Communication

Plan sponsors view communicating information to retirement plan participants as a critical function to connect employees to benefits, educate participants on the offerings and help them properly use their benefits. 

Lisa Gomez, an assistant secretary of Labor and head of the Employee Benefits Security Administration, says ineffective plan sponsor communication may leave workers confused and benefits improperly used.   

“Too often, if the benefits that are being offered are not effectively communicated to participants, then you’re in a situation where [the plan sponsor is] offering these benefits and folks don’t understand that they even have access to them, how to use them, what is meaningful to their families,” she says. “Then benefits either just don’t get used or don’t get used properly. … It’s really important for plan sponsors to be thinking about how to effectively communicate benefits to their participants and their families.”

Effective communication and education help improve participants’ and use of available retirement benefits, says Nicole Durham, an associate partner of strategic communication in Aon PLC.

“If people understand the plan, they’re more likely to engage with it,” says Durham.

That is borne out by results seen at OneAZ Credit Union, where Thea Ammon, a senior benefits administrator, cites a 99.4% plan participation rate.

“If you want to increase participation, you have got to communicate,” she says. “If you don’t communicate, you will not hit higher numbers for participation, because this is not a product that you can just set and forget, even with all of the auto features.”

Brian Coleman, vice president of total awards at Dawn Foods, says the goal should be to elevate participants’ knowledge about both the retirement industry broadly and the specific plan, as well as embedding information across strategies to reach distinct employee cohorts and nudge employees to act. 

But information alone is not enough. Vidhi Sanders, head of participant outcomes at Capital Group, says because every plan’s demographics are distinct and employees have so many demands vying for their time, “you have to find creative ways to get people’s attention.”

Getting the Ball Rolling

Companies that use strong participant communication can see higher participation rates and considerable asset growth while moving the needle for participants’ retirement savings, Ammon says.

“Communication helps drive it, helps people understand it [and] helps people feel more confident with what they are doing and the path that they are on,” Ammon says. “The other component of that is: Once you start someone saving and seeing the accumulation of wealth, then they don’t stop, because then it becomes exciting.”

Sanders says the effect of strong communications is clearly visible and even measurable.

Through effective communication by plan sponsors, “we have seen participants enrolling at three times the rate of participants that have not been effectively communicated with,” Sanders says. “We have seen people increasing their deferral rates at twice the rate of people that have not been communicated with or communicated with effectively. So we have seen the results.”

At Indianapolis-based bakery Aunt Millie’s, working with the plan’s recordkeeper, John Hancock Retirement, to implement communication campaigns “definitely has moved the needle,” according to Judy Bobilya-Feher, the plan sponsor’s chief financial officer.

“We’ve found when we have communication initiatives or education initiatives, that we see a movement … and usually it doesn’t go backwards,” she says.

At Dawn Foods, education has not been the only focus of communication; the company helped plan participants save money by getting them to use available discounts.

While that may seem unrelated to retirement, more money in participants’ pockets means they are likely to save more, and “Oh, by the way, you’re going to be much more engaged and a happier team member,” if the company is helping employees save on routine purchases, Coleman says.

Educating Multiple Audiences

To implement the most effective campaigns, Gomez says understanding the plan and the employee base is an important starting point.

Plan sponsors should think about utilizing different types of media, such as print, electronic and verbal presentations, says Gomez, adding, “It’s good to be creative” and intentional with messages.

“In addition to the written documents that are required, having employee meetings to sit down and explain what the documents mean, what they say, to perhaps have a video or some type of tool that’s available for employees to look at,” Gomez says. “I don’t think everybody digests information in the same way.”

For plan sponsors to get the maximum return from their efforts, proceeding deliberately, developing a communication plan and repeating the messages in several formats are key, advises Durham of Aon. Plan sponsors must stay patient, borrowing from sales and marketing tactics by reminding workers to act.

Given that “people are bombarded from all directions [with information], having a really good communication plan is going to be important, because [employers are] going to need to hit people with the same messages several times for them to stick,” Durham says. “We really want to get participants [to become] smart investors and wise users of their plans, and that’s where some can really make a difference.”

Short videos with a running time of two minutes or less are one example cited by multiple plan sponsors, ideally focusing on a key message and teeing participants up to dig into other resources.

“We’re having a lot of luck with really short, targeted videos,” says Durham. “If we hit them with an important message, like ‘Don’t miss out on your match,’ and not dilute it with a bunch of other messages, we’re having really good luck, kind of engaging people on that end.”

Best Practices

Communications to participants must be engaging and well designed, says Capital Group’s Sanders, specifying that a successful communications campaign should include:

• Fun or warm and inviting types of communications, similar to the kinds of content people are used to consuming on social media;
• Quizzes with hyper-personalization to specifics of the individual participant; and
• Content that is easy to understand, easy to access and authentic to participants.

At Dawn Foods, the plan sponsor develops themes or topics around which to organize communication campaigns, according to Coleman.

“We create thematics, and then we intertwine those thematics in with all of the messaging, so every month … we are looking [from] a total rewards perspective, a retirement perspective, a planning perspective across multiple arenas,” he says.

However, Coleman cautions plan sponsors against using communications unrelated to retirement, even though it may be tempting to utilize events like ‘Pizza Month’ or ‘Donut Month’ to build excitement.

“Sometimes even timely [communications] can get you burned if you tie things … [participants] don’t really feel like they are genuine communications, [and] people kind of blow it off after a while because it’s just [a] flavor of the month,” he says.

Plan sponsors can also consider timing their messages to when a participant’s receptivity is heightened—for example, a work anniversary, birthday or other “trigger” event. Sanders recommends messages be delivered at least quarterly.

Ammon says OneAZ Credit Union communicates with distinct participant groups weekly, biweekly and monthly, depending on the type of group and type of message.

Aunt Millie’s communicates with employees each quarter but is planning to add custom content on internal broadcasts and incorporate retirement-planning topics into company events in 2024, Bobilya-Feher says.