2022 Best In Class: Connecting With Participants

There has been increasing talk within the retirement industry over the last several years of a need to provide greater personalization to plan participants to help them achieve better overall financial wellness and retirement outcomes. Gone is the notion that group education meetings are enough, and in this digital age, plan sponsors, advisers and providers know participants are looking online for help. 

When it comes to the participant experience, how are retirement plan providers doing? 

Data from the 2022 PLANSPONSOR Defined Contribution Survey shows satisfaction with participant services from providers is highest among plan sponsors with assets in the $25 million to $50 million range. The second highest satisfaction rating was in the micro-plan market, although online or mobile retirement planning tools and wellness offerings, as well as in-person or virtual participant support, was lacking. 

The mega-plan market, for which there are fewer recordkeepers due to years of provider consolidation, garnered the lowest average satisfaction score on participant services. 

Andrew Way, senior director of research at Corporate Insight, says he has never heard of a recordkeeper not offering online tools in the small-plan market, but that not offering in-person participant support is more common. He explains there are different ways to offer participants access to in-person help: For example, a recordkeeper might partner with an adviser firm. Recordkeepers are probably looking at it from a cost perspective and think it’s more cost-effective to reserve that service for larger plans, Way observes, “but even the smallest plan should be able to offer participants access to online planning tools.” To get increased participant service, small plan sponsors may need to change recordkeepers.

Participant Must-Haves

Corporate Insight provides research about customers’ digital experience. Way spends a lot of time analyzing the websites of retirement programs and financial wellness programs. Surveying participants and plan sponsors, to gauge what they want, is part of the firm’s research. On a high level, when it comes to digital portals overall, Way finds access to information and data is important.  

“For a lot of people, the only way they are engaging with their plan is logging in to view their balance,” Way says. “Maybe they’ll change their contribution rate and log out.”

Data security is of utmost importance, Way adds: “You especially want to make sure information on the sponsor website is secure, because it includes both plan and participant information.” 

With online tools, Way says what participants want most (and what he sees as a growing trend) is: “Don’t just tell me what I’m doing with this one account; tell me how this fits into my whole financial well-being.” 

Krystal Barker Buissereth, a chartered financial analyst and the head of financial wellness at Morgan Stanley in New York City, previously told PLANSPONSOR that, as more employees worry about their current ability to make ends meet and their future comfort in retirement, they are looking to their employer for help. All generations in today’s workforce can use extra support, she noted. PLANSPONSOR’s 2022 Participant Survey found 43% of survey respondents defined their current household financial situation as living paycheck-to-paycheck. 

The survey also found that of respondents with a financial wellness program at work, 55% reviewed digital/online content. Way says with each passing year, digital capabilities are rising in importance in retirement plan provider requests for proposals. “Providers are both losing and winning business based on this,” he says. “More people are using digital resources for their financial wellness. They are looking for self-service and to be able to understand how their efforts fit into their overall goals.”

According to Way, a mistake retirement industry advisers have made for years was focusing only on participant saving. “They finally realized participants need more overall financial wellness,” he says. “A lot of financial wellness trends came from recordkeepers starting to work on tools to help participants get rid of debt or save for emergencies before focusing on saving that recommended 10% for retirement.”

Way says a “must-have” for providers is a responsive relationship manager for clients.

Recordkeepers Stepping Up

“In terms of stepping up with larger plans, many of these plans are Fortune 500 companies—they have the power to walk away,” Way says. “Recordkeepers should make them feel special, offer a dedicated support team and don’t make them wait.”

Way adds that one thing financial wellness providers do very well, and a reason plan sponsors might choose them rather than going with financial wellness solutions provided by recordkeepers, is assemble dedicated implementation and engagement teams that provide hands-on support. Those teams are an extension of the plan sponsor and are good at getting participants aware of what is available to them and how to use it.

“One of the biggest issues we’ve seen is that many participants are not aware of what online [retirement planning and financial wellness] tools they have available to them,” says Way. “Recordkeepers need to work with plan sponsors to make participants aware.”

One way many leading recordkeepers are stepping up is by providing data to plan sponsors on participant engagement with websites and different campaigns, according to Way.

The good news is that in the more than 10 years Corporate Insight has been tracking about 25 recordkeepers on a daily basis, Way has seen recordkeepers come a long way in building more user-friendly and robust websites and planning sites.

“Their job now is to make participants aware of what’s available.”

—Rebecca Moore