Administration April 27, 2017

Best Practices for Participant Communications Analyzed in Study

A study from Corporate Insight shows use of the best practices in participant communications reliably increases enrollment, deferral rates and dialogue.
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Plan sponsors are increasingly taking it upon themselves to devise their own communication strategies to engage their participants in financial as well as health wellness, according to the inaugural WorkPlace Exchange (WPE) report from Corporate Insight.

This study is based on actual materials submitted for review from sponsors whose plan size was at least $1 billion in assets, and some of the best practices shown realized increased enrollment, deferral rates and dialogue.

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Video is a preferred format for an introduction to topics such as benefits and retirement plans due to the succinct nature in which topics can be covered, Corporate Insight says. The most impressive piece it found was an animation that provides a full view of a broad benefits program for new employees in less than four minutes. “The employer clearly recognized potential of multimedia, which allowed it to introduce concepts like HSAs and enrolling in their retirement plan, but not go in nearly as much depth as is covered in forms and other hard copy versions that the video is meant to supplement,” Corporate Insight says.

The most logical social media property to start with is Facebook, given the varied nature of conversation on it and its overall reach compared to other social media, according to the report. One plan launched its Facebook page 18 months ago, and realized a 50% increase in communications between followers and the plan, as well as an uptick in enrollment and deferral rates. “Facebook allows plans to build a dialogue with participants and employees in a centralized place. It also allows for the attachment of materials that may be helpful to those following the plan,” Corporate Insight says.

Another firm sent an automatic enrollment mailer to participants who were not enrolled in the plan. The mailer included a clear explanation for the outreach—the recipient is targeted because they are not enrolled in the plan. This outreach resulted in 82% of participants enrolling in the plan and remaining; 93% of millennial participants remained. In addition, hourly employee participation increased form 50% to 92%.

Traditional forms of communications such as newsletters, mailers and checklists can still be highly effective if they are visually appealing, well organized and clearly communicated.

In addition, a checklist for plan sponsors provided by one respondent helps keep its plan organized and compliant. The checklist helps identify risks and enables assignment of oversight accordingly, as well as helps protect against lawsuits. The checklist provided offers 45 tests across seven categories, including nondiscrimination tests and record retention requirements.

Data and Research April 27, 2017

Small Businesses Debate Role of State-Based Retirement Plans

LIMRA finds reactions were “mixed” among small-business owners regarding Connecticut’s forthcoming program offering state-administered retirement planning to private-sector employees. 

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LIMRA Secure Retirement Institute polled small-business owners in Connecticut about their opinions regarding the forthcoming retirement planning program that will be administered by the state and offered to private-sector workers.

While work is already underway behind the scenes, the “Connecticut Retirement Security Plan” will begin widespread public operation in 2018. In the most basic terms the program will require all Connecticut businesses of five or more employees with no defined benefit or defined contribution savings arrangement to participate in the retirement security program. Employee participation will be voluntary, taking a negative-election approach such that employees will initially be auto-enrolled and will have the ability to opt out. Employers will not be required to match contributions.

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With the program finally coming into fruition after years of debate and development, the LIMRA Secure Retirement Institute decided to conduct four focus groups made up of small-business owners in Connecticut “to better understand their feelings about the state’s new retirement plan and what they understand about it.”

As LIMRA explains, “the results of these focus groups also provide insight into how small-business owners across the nation may react to the mandates of possible upcoming retirement legislation.”

Unsurprisingly, LIMRA finds reactions were “mixed” among the small-business owners regarding the new program.

“There was also some confusion about the state-run retirement plan and how it would affect their businesses,” LIMRA warns. “In fact, some small-business owners did not realize a state plan actually existed. Others were confused about certain features, especially the required income option. Many simply did not believe their employees would value a state-run plan or utilize it.”

Naturally, LIMRA finds general “mistrust of government entities administering a state-run plan” fuels some negative responses. Other negative responses are pinned to “unsatisfactory experiences with state-based health exchanges.”

“In other cases, participants conflate the state managing the new state-run retirement plan with the already established state teachers’ and employees’ pension programs,” LIMRA warns. “Both have faced well-publicized funding and liability challenges.”

LIMRA reports that employers with positive reviews of the state plan “appreciate that the state is addressing a potential retirement predicament and providing employers with a new benefit they were unable to offer before. They are also pleased the state is taking responsibility for the plan and that employees can take their accounts with them if they were to change employers.”

The full LIMRA Trends analysis is available here. 

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