Data and Research September 15, 2022

New Study Examines Motivations for Plan Engagement

Recent research challenges old findings that fear is a better motivator than encouragement when it comes to plan engagement.

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The Defined Contribution Institutional Investment Association’s Retirement Research Center has published an update to previous research on the relative effectiveness of fear-based and encouraging messaging in motivating defined contribution plan participants to engage more in their plan.

In July 2021, DCIIA published research that tested the relative effectiveness of fear-based (sometimes referred to as cautionary) messaging versus encouraging messaging in getting plan participants to act on behalf of their own retirement. The 2021 study argued that motivating recipients to engage is an important measure of the success of the plan, and demonstrated that while encouraging and cautionary messaging both work, cautionary messaging is more effective.

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Respondents were asked seven questions to gauge their baseline engagement in their plan. Then they were shown either a cautionary message that warned that they were short of their retirement goal or an encouraging message that congratulated them for being within range, though still short, of their goal.

The cautionary message triggered consistently higher engagement when the seven questions were asked again than the encouraging one. However, the researchers argued that too much fear can be counterproductive since it can make a recipient’s retirement goal seem impossible to reach, which could discourage engagement.

A follow-up DCIIA study released this week looked at 1,500 people in the Indiana Public Retirement System. Some were sent an email with an encouraging message, and the rest received an email with a cautionary one. They then counted the number of email recipients who opened the email at once, and then the number that logged in to their account.

The study found that 39% of those who received an encouraging message opened their email, versus 34% of those who received a cautionary email. Of those who were encouraged, 21% went on to log in to their account, whereas 12% of those cautioned did so.

The study did not track what those respondents did after logging in, nor ask them what precisely motivated them to do so, so it is not clear to what degree they actually “engaged,” or what form that engagement took. This is unlike the previous study, which examined seven specific forms of engagement, such as whether they would be more likely to speak with a financial professional.

The study says DCIIA’s past work in an experimental or “theoretical” setting showed that cautionary messaging was more motivating for plan engagement, whereas encouraging messaging was more motivating in a “real-world” setting.

One possible criticism of this interpretation is that the second study considered relatively superficial actions such as clicking on an email and then logging into an account as plan engagement, whereas the first considered seven more active and nuanced methods of engagement, such as looking carefully at one’s retirement income statement.

The study concludes by recommending varied and creative communication to encourage engagement
Deals and People September 15, 2022

EBRI CEO Lori Lucas Announces Pending Retirement

Lucas will stay at the helm through the end of the year while helping the research group source its next leader.

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The Employee Benefit Research Institute has announced that Lori Lucas, the research group’s president and CEO, will retire from the organization at the end of 2022. 

EBRI’s announcement notes that Lucas is actively involved in the organization’s search for and transition to a new leader and that she will continue to be fully engaged in leading the EBRI team and serving member needs through the end of the year.

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While she has held the president and CEO role since 2018, Lucas’ professional history with EBRI dates back to 1999. She has held roles including vice chair and research chair, having moved into the top leadership position in the same year the organization celebrated its 40th anniversary.

EBRI’s announcement says Lucas has been instrumental in implementing a new vision for the research group, “one that took EBRI into the future while honoring and preserving the organization’s deep history, founding mission and established reputation as the premier research organization across all aspects of the employee benefits space.”

“Lori came in with a deep respect for EBRI and its mission, as well as an understanding of the quickly shifting paradigms and emerging trends that were redefining the employer/employee benefits industry,” says Joshua Cohen, chair of the EBRI board of trustees, in the announcement. “Her approach enabled us to stay nimble, responsive, accessible and relevant to our members, and to employers, policy makers, individual workers and the media.”

Under Lucas’ leadership, EBRI produced extensive and much-cited research and analysis on topics such as the emergence of gig workers, unique needs of Millennials, gaps in retirement plan coverage, the Baby Boomer retirement era, and expanding the traditional definition of employee benefits to include student loans, emergency funds and other aspects that contribute to overall financial wellness.

Lucas was also instrumental in the recent redesign of EBRI’s membership structure and in paving the way for connections with new companies and industries.

Back when she took on the role as president and CEO, Lucas told PLANSPONSOR she would seek to pursue a new vision for EBRI’s future as it marked its 40th anniversary. The key to the new vision, she said, was to make the group’s research “more relatable.”

She said she would be able to achieve this vision by relying on her industry background, and in particular her experience as Callan’s defined contribution practice leader and at Hewitt. She also emphasized that she would work to ensure EBRI remained a presence on Capitol Hill, providing key information to support federal policy decisions.

In taking on the leadership of EBRI, Lucas replaced Harry Conaway, who was president and CEO for two years, following the retirement of Dallas Salisbury, the founding president and CEO. Salisbury had held the role for more than 30 years.

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