ETRADE says it used its latest research to guide its redesign of the online experience for stock plan participants.
According to its recent stock plan participant survey, ETRADE Securities found two out of five stock plan participants don’t understand vesting and two out of three don’t understand the tax implications of their plans. And despite using the equity received from grants to fund retirement plans, many plan participants have trouble understanding the core aspects of their benefits.
In an attempt to reverse this trend, ETRADE says it created “a greatly enhanced experience, offering a simplified interface that provides clear insight and actionable steps to help plan participants with making informed decisions.”
Going forward, participants will be able to access a new, consolidated dashboard with an overview tab which can provide a glimpse of account holdings, action items for review, and important dates. A hypothetical account value calculator can help investors understand the potential impact of stock price changes and future potential grants.
Participants can also instantly see which grants are ready for acceptance, which are unvested, and which are exercisable–while now being able to pivot between holding type and status. The new interface and self-help options enable participants to accept grants, sell shares, or exercise options with just a few clicks, ETRADE says.
The new Knowledge tab provides curated educational resources on stock plan basics, tax reporting, and planning for retirement, along with stock plan calculators to help work through the potential results of certain transactions.
“Education is paramount when it comes to equity compensation, because participants will only truly appreciate their plan benefits when they understand them,” says Paul Hutchison, SVP of ETRADE Financial Corporate Services, Inc. “Simplifying the stock plan experience, while at the same time working to engage and educate plan participants, were our central areas of focus. The redesign reflects our efforts to help demystify stock plan benefits and provide a best-in-class experience when coupled with our dedicated human support and onsite training.”
The Government of the District of Columbia offers several retirement plans to employees. Employees hired before 1987 are under a civil service retirement program, while those hired after are offered a 401(a) plan and a 457(b) plan. Police, firefighters and teachers have a defined benefit plan (DB) but all employees are able to participate in the 457(b) plan.
Employees are automatically enrolled in the 401(a) plan after one year of service, so the plan has 100% participation of eligible employees. The 457 plan is voluntary, with an aggregate participation rate of about 48%; although the participation rate in some government agencies is higher.
John S. Henry, associate treasurer – asset management in the Office of Finance and Treasury for the Government of the District of Columbia, explains that simply because the contract for the prior recordkeeper to the 401(a) and 457(b) plans was ending, the government issued a request for proposals, and ended up selecting ICMA-RC as the recordkeeper starting in August 2015.
One of the things the government liked about ICMA-RC was the company presented a good number of tools to potentially increase enrollment and engagement in the 457 plan. The Government of the District of Columbia recognized that with most employees not having a DB plan to supplement the 401(a), participating in the 457 plan was necessary to really have enough retirement income. In addition, he says there was concern that employees didn’t understand their retirement offerings, and if they did, they didn’t know how best to utilize them.
The government asked ICMA-RC to bring some unique things to employees. One of the tools the government wanted to use was ICMA-RC’s RealizeRetirement tour, which the government offered to employees in June.
NEXT: The RealizeRetirement tour
ICMA-RC President and CEO Bob Schultze, located in Washington, D.C., says the RealizeRetirement tour is for employees of any age. “We want to get those not engaged in their plan to be engaged. And, because of the technological focus, it appeals to younger employees. However, survey feedback shows it is getting other generations engaged as well,” he says.
The RealizeRetirement tour is held in a truck that has a number of tools for employees to use.
Schultze says one tool is an animation application that allows employees to take a picture of themselves, to which then the tool places them in a trip through retirement so they can visualize what they want to do during that period. The employees are asked for their name, age range, email address, which public-sector job they hold and what they want to do in retirement—travel, hobbies, finish a bucket list. The answer to the last question creates their own animated retirement dream—a hobby could be cooking, a travel desire may be France, a bucket list could include driving a race car.
Another tool is a virtual reality exhibit. Employees put on goggles and get to see three miniature movies which pictures public-service employees in action. “It honors them,” Schultze says. “And the virtual reality goggles seem to be the most popular attraction in the tour. It’s a good way to get people’s attention, and once we have that attention, their local ICMA-RC representative can talk to them about retirement.”
Schultze notes that at each stop, the local representative is present, circulating among employees and getting follow up information. In addition, the representatives have enrollment kits with them if employees want to take immediate action.
The RealizeRetirement tour also includes a selfie station that is set up like a photo booth. Employees can have their picture taken and have it superimposed on backdrops, such as travel destinations around the world. They can text the picture to friends or post on Facebook. There are also iPads with calculators for employees to use and a prize wheel that employees can spin to win a prize.
More than 450 District of Columbia Government employees in nine locations participated in the tour.
NEXT: After the tour
Sixty-eight percent of employees who participated in the tour held one-on-one meetings with ICMA-RC representatives, and 14% of those who participated enrolled in the 457 plan.
Henry says the government has seen an increase in activity, tracked by the number of participants dialing into the 457 plan’s call center and website. “They are more engaged and have questions,” he notes.
He also says, among the population of participants who participated in the 457 plan since ICMA-RC became recordkeeper in 2015 through July 2016—after the RealizeRetirement tour—the average contribution rate has increased 7%.
Feedback from employees who participated in the tour was very positive. According to Henry, Millennials said it was an excellent way to get them to think about retirement, noting they weren’t thinking about it before the tour, but they are now. For older generations, they said it was fun, and they enjoyed seeing the videos of public employees in action. They said the tour made them rethink what they were doing to save for retirement and question whether their contribution was enough and whether their investment allocation was right. They realized the need to talk to an ICMA-RC rep.
Although, the RealizeRetirement tour relieved some of the government’s concerns, Henry says more of its locations need to be reached, and he’d like to bring the tour to these areas more than once. According to Schultze, ICMA-RC originally expected 45 stops around country, but due to demand it now has 150 scheduled.
“We definitely want to hit more locations when ICMA-RC brings the tour back to D.C.,” Henry says.