By focusing on one or two behavioral goals, sponsors can break information down into digestible and actionable items and reiterate certain plan features of which participants are unaware or not taking full advantage.
Keep messaging clear and simple. For more tips on how to create engaging and effective participant communications, see our Communications Best Practices guide.
2. Offer Advice Outlets
Open enrollment is often a time when participants are required to make a decision regarding their benefits. When it comes to retirement planning, many participants rely on financial experts to develop a long-term strategy that’s right for them. State Street’s 2018 Global Retirement Reality Report surveyed over 9,400 savers and retirees across the world to gain insights into and understand gaps between retirement expectations and realities. As part of the effort, retirees were asked what advice they would give current savers. The responses were uncannily consistent:
- 88% said save early and benefit from compound interest
- 71% said save more, if possible
- 68% said seek professional advice sooner
In the US, the topic of advice was fraught, as many responders looked to their employers for guidance, but very few had a satisfactory experience. Given the expressed demand and importance, sponsors should consider avenues for their employees to access one-on-one financial counseling.
3. Run a Re-enrollment Program
Choosing the right investments can be overwhelming for a participant. Both inertia and lack of knowledge present significant hurdles –and create plan pitfalls. For instance, if participants don’t properly apply diversification or rebalancing strategies to their portfolios, they could be taking on an inappropriate level of risk and negatively affecting their investing outcomes. A re-enrollment campaign that sweeps employees back into a default strategy, like target date funds, can greatly benefit those whose risk profiles don’t properly align with their age. Re-enrollment can harness that lack of decision-making by making participation an opt-out experience; in which case, inaction translates into a well-balanced savings strategy.
4. Facilitate a Financial Wellness Program
Financial stress can significantly affect an individual’s physical health and workplace performance. This issue is particularly pressing given that more than 67% of Americans say they are somewhat or even extremely anxious over the state of their finances, according to a 2018 poll conducted by the American Psychiatric Association. As employers are often seen as a trusted source of financial information, and have a vested interest in employees’ productivity, organizations might consider building out a financial wellness program. For those sponsors looking to get started, we’ve created a six step framework to help introduce a program into your workplace.