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Open enrollment season: For participants, it’s the time of year when they’re most engaged with their financial benefits. For plan sponsors, it’s a chance to re-evaluate what’s working for employees and what’s not. It also could be the perfect opportunity for engagement and education. Here, we review 5 strategies that could drive better outcomes for your participants.
1. Be Ready with the Right Message at the Right Time
Information is best received when it’s relevant to the audience. A period of change – like open enrollment – is prime time for engagement and intervention because benefits are top of mind.
Plan sponsors should take this opportunity to refine and recommit to messaging goals by choosing one or two areas of emphasis, such as boosting savings rates or increasing plan participation. A more narrow focus can lead to greater clarity in messaging. Establish a goal and tailor the tone and emphasis of the content by participant segment. Bonus points if you have specific plan features that might help with the goal. For instance, if the goal is to boost savings rates, and your plan has an opt-in auto escalation program, communicate its value and provide easy steps on how to sign up. Finally, consider segmenting the audience based on behavior to allow for goal-specific messaging. For a savings campaign, segmentation could include:
For: | Focus on: |
---|---|
Participants not getting the full match | Actionable content encouraging participants to save more to get the full match |
Participants not enrolled in an auto-increase program | Adoption of auto-escalation and enable participant inertia to have a positive impact |
Participants above the match but not at the federal limit | Communicating the benefits of a 1%-2% increase; include an interactive calculator to show how a small increase can have a meaningful impact on balances at retirement |
More Insights
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:
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.