Turning crisis into engagement: Participant outreach for Defined Contribution plans

Geopolitical crises and market volatility can cause retirement plan participants to question their savings decisions. In this article, we outline an outreach approach for sponsors that combines guidance and education to help defined contribution participants feel confident and informed.

Winston Churchill famously said “Never let a good crisis go to waste” near the end of WWII as he was forming the United Nations. What he meant, simply put, is that crises often present opportunity. While they can be disruptive and, at times, unsettling, periods of stress are also inflection points: moments when change becomes possible and engagement increases.

Applied to Defined Contribution plans, these points of inflection are when participants are more likely to engage with their financial benefits and reassess decisions. These moments do not always stem from crises. Non-crisis inflection points might include changes to an investment lineup, a re-enrollment, a job transition, or a life event such as the birth of a child. These are predictable moments when proactive outreach, paired with targeted education and clear calls to action, can have an impact.

Then there are true “crises”—events that may disrupt both markets and personal finances. Over the past several years, participants have navigated historic market volatility, the COVID-19 pandemic, geopolitical events like the US/Israel/Iran war, persistent inflation, and the most aggressive interest-rate hiking cycle in decades. Many are now contending with student loan payments, housing affordability challenges, and ongoing economic uncertainty. Each of these developments affects how participants view their retirement readiness and overall financial security—and they’re looking to their employers or plan sponsors for leadership, outreach, and guidance.

Anticipating and meeting participant concerns    

Regardless of the nature of the crisis, sponsors should expect employee questions or anxieties, and have resources readily available in the form of:

• Clear talking points for call center representatives and benefits teams to address participant questions confidently and consistently.
• Educational materials to demystify complex or emotional topics—market volatility, inflation, or interest rates—into plain language.
• Live or recorded webinars and seminars lead by registered representatives, financial wellness experts, or company leadership, to reinforce key messages and provide credibility.

Let’s go back to the market volatility example. Participants experienced sharp downturns during the early months of 2020, another difficult period in 2022 (the worst year for markets since 2008 financial crisis), and continued uncertainty through recent rate hikes and the US/Israel/Iran war. To help our plan sponsor clients ease participant concerns, we created a sample educational brochure that addresses market volatility and emphasizes the main tenets of retirement investing—staying the course (taking the long view), asset allocation, and diversification.

Periods of volatility are also a good opportunity for sponsors to reiterate how these principles exist in their plans, articulating the built-in diversification of default options like target date funds and the range of investments available within the core menu, intended to dampen volatility.

Sponsors can further emphasize value by pointing participants to advice and guidance resources available through the recordkeeper. Some participants may be unaware that these services exist, and periods of stress create a natural moment to increase awareness and engagement with an array of resources.

Case Study: How one plan sponsor boosted participant engagement during a crisis

In 2019, just prior to the COVID pandemic, one plan sponsor had recently rolled out a successful participant program centered on in-person events. These sessions were intentionally high-touch, featuring financial professionals available for one-on-one conversations and experiential elements like a red carpet and a food truck, which made the events feel meaningful and accessible. The response was overwhelmingly positive, and the sponsor planned to expand the program in 2020.

Then COVID-19 hit. In-person events were no longer viable, and the benefits team was forced to pivot quickly. What initially felt like a setback became an opportunity to rethink engagement.

Instead of the six in-person events they had planned, they arranged for 12 virtual events covering topics such as market volatility and retirement readiness. Leveraging recordkeeper data, the team also deployed targeted outreach to higher-risk populations (like participants whose asset allocations were misaligned with their age or retirement horizon), encouraging them to review their strategy.

By late summer, more than 850 participants attended 10 virtual events, and 21% went on to schedule one-on-one sessions with a financial representative.

Turns out, employees like remote sessions. They’re easy, accessible, and most of all—convenient. So, in the long run, what was thought to be a less desirable engagement strategy (virtual versus in-person) turned out to be just the thing employees wanted. Not to mention, they’re great for plan sponsors, too.

And thus, necessity is indeed the mother of invention. In having to pivot, our client ended up developing a more nimble outreach strategy and garnered better participant engagement during what was a very challenging year for the whole world.

Why participant communication can’t wait

In periods of market or economic stress, defined contribution plan sponsors should expect higher participant uncertainty—and respond with consistent, proactive communication. Outreach that explains what the plan offers (diversified defaults, core menu options, as well as further available guidance) can help participants stay focused on long-term retirement outcomes. The result is stronger participant confidence and greater utilization of plan resources.