Benefits June 20, 2013

Helping Women Engage in Retirement Planning

June 20, 2013 (PLANSPONSOR.com) – Women (27%) are less engaged in retirement planning than men (37%), a white paper from Lincoln Financial Group indicates.
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So how do plan sponsors get women engaged?

Linda Jacobsen, head of plan sponsor experience for Retirement Plan Services at Lincoln Financial Group, and based in Radnor, Pennsylvania, told PLANSPONSOR the firm’s study found women are responsive to one-on-one meetings with retirement-related advisers. “Forty-six percent of women made decisions based on such meetings and then took action from that.” The research also showed that 51% of women said this was their first choice for such information.

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“With advisers, it’s a matter of trust as well as credentials,” she said. “It’s not about a transaction but a trusted relationship.”

However, Jacobsen said, the preference for one-on-one meetings does not exclude the use of other delivery systems. “The approach should be multifaceted. Small group meetings can also be helpful, as are emails and social media. Plan sponsors should not exclude the use of online tools, such as calculators and worksheets, but need to understand that these should complement the one-on-one experience.”

Jacobsen added that Lincoln found women respond more to emotional factors, such as hope and fear, instead of facts and data—which can be prone to skewing—and this tendency was evident when they made decisions about contributions and investing for retirement. Ninety-one percent of women relied on the hope factor, compared with 85% of men. With the fear factor, 73% of women relied on this, compared with 59% of men.

Given this difference, Jacobsen recommended plan sponsors use a more individualized approach when it comes to discussing retirement planning with women. “I would say to plan sponsors that you should not hand women a fact sheet, but rather take time to translate their hopes and fears into specific retirement goals, such as what their risk tolerance is, and then build a road map to achieving those goals.”

Simplicity and straightforward choices are important, both with investments and other materials. Jacobsen advised, “Make the decision easier, since we found that women have a limited amount of time during the day for choices like this. We found that they have many priorities, both inside and outside of the office.”

She added that the more meaningful and personal a plan sponsor makes the retirement planning process, the more useful it becomes to women. “Have materials organized so that women are presented with clear and easy goals to be met. This way, they can make the choice that’s right for them.”

According to Jacobsen, plan design can help as well. “Plan features like automatic enrollment and automatic escalation reinforce the power of plan design, which plan sponsors can use to make decisions easier for participants.”

Only 35% of women in the study said they are the primary decisionmaker in their household. Since many women share the decisionmaking, Jacobsen advised plan sponsors to consider bringing their partners into the process and factor in the extra time that may take.

Overall, said Jacobsen, the aim should be to help participants retire with a better outcome.

On behalf of Lincoln Financial Group, Matthew Greenwald & Associates, Inc., surveyed more than 2,500 retirement plan participants for the paper during late 2012. The full white paper, as well as highlights and a three-minute video about the paper, can be found here.

Benefits June 20, 2013

HHS Expresses Confidence Exchanges Will Be Ready

June 20, 2013 (PLANSPONSOR.com) – State exchanges and federally facilitated exchanges (FFE) for 34 states that will not operate a health care exchange must be established by October 1.
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The Government Accountability Office (GAO) found the Centers for Medicare & Medicaid Services (CMS) completed many activities necessary to establish FFEs by October 1, but many remain to be completed and some are behind schedule. The activities remaining cross the core exchange functional areas of eligibility and enrollment, plan management, and consumer assistance.  

“Much progress has been made, but much remains to be accomplished within a relatively short amount of time,” the GAO said in a report. However, commenting on a draft of the GAO report, the Department of Health and Human Services (HHS) emphasized the progress it has made in establishing exchanges, and expressed its confidence that exchanges will be open and functioning in every state by October 1.  

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According to the GAO findings, to support consumer-eligibility determinations, CMS is developing a data hub that will provide electronic, near-real-time access to federal data, as well as provide access to state and third party data sources needed to verify consumer-eligibility information. While CMS has met project schedules, several critical tasks, such as final testing with federal and state partners, remain to be completed.

For plan management, CMS must review and certify the qualified health plans (QHP) that will be offered in the FFEs. Though the system used to submit applications for QHP certification was operational during the anticipated time frame, several key tasks regarding plan management, including certification of QHPs and inclusion of QHP information on the exchange websites, remain to be completed.  

In the case of consumer assistance, for example, funding awards for Navigators—a key consumer assistance program—have been delayed by about two months, which has delayed training and other activities. CMS is also depending on the states to implement specific FFE exchange functions, and CMS data show that many state activities remained to be completed and some were behind schedule.  

“CMS’s timelines provide a roadmap to completion; however, factors such as the still-evolving scope of CMS’s required activities in each state and the many activities yet to be performed—some close to the start of enrollment—suggest a potential for challenges going forward,” the GAO warned. “And while the missed interim deadlines may not affect implementation, additional missed deadlines closer to the start of enrollment could do so.”  

In a separate report, GAO noted that CMS granted conditional approval to 18 states to establish state-based Small Business Health Options Programs (SHOPs). Just as with FFEs, the agency found much still needs to be completed to establish SHOPs, and additional missed deadlines could jeopardize implementation. Again, HHS expressed confidence SHOPs would be ready by October 1.

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