Benefits September 18, 2013

Speaking a Language Participants Can Understand

September 18, 2013 (PLANSPONSOR.com) – Saving for retirement is not something people think about, and the way people communicate has changed over the years.
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According to Michael Kiley, president and owner of PAi, Inc. a third-party administrator (TPA) and recordkeeper for the small plan market in Green Bay, Wisconsin, most people don’t want to know what the retirement industry knows. “We talk to each other by playing games and sharing humor,” he told attendees of the Plan Sponsor Council of America’s (PSCA’s) 66th Annual Conference.

For example, Kiley said his firm tested the use of lifetime income on participant statements and found something that works better. Instead of a monthly income projection, PAi communicated to participants how many years of retirement they had accumulated savings for. They also offered a mobile application that told participants “click here to get ‘x’ more years.”

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To make the message relatable, the app positioned retirement as a tangible product choice, for example, by asking participants, “Do you want a big screen TV or 2.5 more years of retirement?” In the spirit of gaming, Kiley said to tell people how to accumulate things (i.e., more years of retirement).

Kiley contended there is no coverage problem in America; there are a variety of tax-advantaged vehicles for individuals to save for retirement. But, people do not know how to “buy” these products. Kiley suggested using language individuals can relate to, just as car manufacturers did when they started measuring miles per gallon (mpg). Kiley said easier language makes it easier for people to talk to each other.

Kiley suggested giving points and rewards for good plan behavior, such as a plan coupon for correctly answering a trivia challenge or points (to cash in for rewards) for positive savings actions. In addition, plan sponsors and providers should use networks on which people share, such as Facebook. Kiley also suggested using brands people know; for example, an NFL theme could be something like “1st and 10%.”

Kiley said one rule is that providers cannot pay rewards; they cannot pay to get assets. An attendee also told the audience to keep in mind that prizes to employees may be considered taxable income.

Aside from plan sponsors using these strategies, Kiley said states should get involved and use such gaming techniques for their citizens, because their economies will suffer if retirees do not have money.

Products September 18, 2013

Buck Offers Automated DC Plan Solution

September 18, 2013 (PLANSPONSOR.com) – Buck Consultants has released Savings InSight, a solution that will allow employers to automate their defined contribution (DC) retirement programs.
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Savings InSight, part of Buck’s retirement plan services, will be provided to workers through an employer’s intranet. It works for any type of defined contribution plan or design and with any recordkeeper. The employer’s management team sets targets and assumptions for the underlying retirement date, income level and payout period, resulting in more control over the eventual retirement readiness of its employees.

“Savings InSight will transform workplace retirement savings into a process that’s automatic and easy for everyone, from the market-savvy to the novice employee investor,” said Ted Goldman, Buck’s North American retirement practice leader. “People will know exactly where they stand in relation to their savings goals, and this confidence contributes to more focused, productive and engaged employees.”

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Savings InSight will enable employers to offer a retirement readiness solution that:

  • Enrolls employees automatically;
  • Sets a savings target for each employee based on age, pay and current savings, taking into account all retirement income sources;
  • Calculates a “smart” career contribution pattern that provides employees with customizable options based on their expected retirement age and income goals in retirement;
  • Invests in one of a plan’s default funds, though employees always may select alternative investments;
  • Reviews an individual’s actual results against the target, and automatically makes contribution adjustments that keep the program on track; and
  • Establishes a payout schedule that lasts throughout retirement.

According to Buck, it created Savings InSight to help companies assist their employees with smart, automated retirement planning and to boost employee confidence, make retirement patterns more predictable and let companies align them with business objectives.

“This service is built to bridge the savings gap we face as plan sponsors, individuals and society as a whole,” said Mike Roberts, group president of human resources services at the firm.

Buck Consultants, a Xerox Company, is a human resource (HR) and benefits consulting firm.

More information about Savings InSight can be found here.

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