SURVEY SAYS: Electronic Communications

Last week, I asked NewsDash readers which required communications they offer to participants electronically, and whether they think this makes participants more likely to read them?

Eighty-five percent of NewsDash readers who responded work for plan sponsors, and 15% work for TPAs/recordkeepers/investment managers.

The summary plan description (SPD) is the required communication most offered electronically, selected by 75% of respondents. Fourteen percent of responding readers reported they do not offer any of the required communications electronically, and none of the respondents indicated they offer all the communications electronically.

For the other listed required communications, responses were as follows:

• Participant statements – 60.7%;
• Participant fee disclosures – 60.7%;
• Summary annual reports (SARs) – 67.9%;
• Summary of material modifications (SMMs) – 57.1%;
• Defined benefit (DB) plan funding notices – 17.9%;
• Automatic enrollment notices – 17.9%;
• Qualified default investment alternative (QDIA) notice – 50%;
• 1099-Rs for participants who received distributions – 10.7%; and
• Safe harbor 401(k) notice – 17.9%.

When asked if offering communications electronically makes it more likely participants will read them, only 6.9% said yes, while 48.3% indicated this is true for some participants. The other 44.8% said no.

In verbatim comments, some respondents explained why they still provide paper, others offered suggestions, “It is a shame that participants bear the costs of notices that, for the most part, never get read and instead line their garbage cans. It would be a lot cheaper if we could default to electronic notices and then produce paper for those participants that request it (as they are probably the only participants that will actually read the notices).” Most agreed that electronic communications is not the answer to getting participants to pay attention to them, with one reader offering a suggestion for that: “The participants would read the notices if they were written in plain English and not the hybrid Lawyerese that most are written in.” Several said the benefits of electronic communications are they lower cost and “save a tree.” Editor’s Choice goes to the reader who said, “Participants will never read communications… MAYBE if you told everyone JK Rowling wrote them.”

A big thank you to everyone who participate in our survey!

Verbatim

We provide notices on paper with a backup of electronic to meet the rule requirements. It is a shame that participants bear the costs of notices that, for the most part, never get read and instead line their garbage cans. It would be a lot cheaper if we could default to electronic notices and then produce paper for those participants that request it (as they are probably the only participants that will actually read the notices).

Unfortunately, I find that participants don't read anything regardless if you send it electronically or by paper.

We still use paper for most reporting, since our employees are more comfortable with that communication. I do not think they will be more likely to read if done electronically. And most just take the paper copy and file it away, unread. So no win either way.

As a manufacturing company the vast majority of our employees are not on our e-mail system. Many of them do not have e-mail addresses and capturing such info from those that do would be challenging at best. We continue to mail/distribute hard copies. We will e-mail certain things such as the SAR to salaried employees and distribute hard copies to the others. I do find that it seems to be just as easy to ignore e-mails as it is to ignore hard copies.

The same folks who don't read the hard copies don't click through to read the electronic disclosures but it does reduce expenses and our carbon footprint. We're moving to auto-enroll in e-communications, with paper as the make-a-choice option. We expect this will all but eliminate hard copies for newly eligibles.

The increase in plan communications required by regulations assures that participants will ignore nearly all communications - paper or electronic. For most participants the disclosures are way too much information!

Verbatim (cont.)

The participants would read the notices if they were written in plain English and not the hybrid Lawyerese that most are written in.

Some of our employees do not use email. So, we find we are more likely to get participants to read of we include notices in paychecks. This is our main use of communication. Still, not all participants read what they are given......no matter how you communicate it. They want to be spoon fed!

Very few participants of any benefit plan read the material sent to them unless and until they have cause to do so. When asked if they received an item, they often tell HR "Oh, I threw that out."

Although we have an intranet that employees can access, the majority of our employees do not sit at a desk. I'd love the idea of being able to just post notices but I fear because our population is on the floor that we wouldn't pass the sniff test of any Federal auditors.

Participants are asking more and more for statements on-line and statement on demand. This has become a priority for our company to provide these services.

Participants will never read communications...MAYBE if you told everyone JK Rowling wrote them.

OMG! No way I'm going to read all this - I unfriend you. Same ol' same ol' but the really good thing is having saved a tree.

Either means people do not read government mandated notices. At least electronically you have a record of receipt and you save a tree for each employee annually