The vast majority of retirement plan participants are not actively engaged in leveraging their retirement plan as planning vehicle. The underlying reason is that plan participants have simple communication needs – but typical retirement plan communication materials are technical and complex.
Numerous participant behavior studies indicate that the majority of retirement plan participants do not read, or even open, the employee communications materials sent to them. In fact, a recent International Foundation of Employee Benefit Plans (IFEBT) survey found this behavior to be, by far, the top challenge of benefit communications (see Benefits Communication Survey Results).
Some reports reflect plan participation and contribution rates as much as 30% higher when participants feel engaged in a personal retirement plan experience. Plan sponsors who fail to create these personalized participant experiences tend to fail in three areas:
- Lack of specific detailed knowledge of their employee population
- Failure to use diverse, employee generation specific, topics and formats
- Impersonal, overly technical, communications that fail to speak to personal circumstances and scenarios
OpenPlan™ creates positive plan participant engagement and provides the guidance they seek by applying three fundamental concepts.
First we initiate a comprehensive discovery process (see Plan Development) that provides us with key demographic indicators such as the “Retirement Readiness” status of current plan participants and investment patterns by different generations of plan participants.
During discovery we also conduct participant surveys to provide insight into the participant mindset. In addition to participant evaluations of current plan communication materials and methods, we solicit participant input regarding ways to improve communications and subject matter by order of importance.
Adult Learning Principles
In his seminal work on adult learning, Malcolm Knowles detailed four basic principles of Adult Learning (Andragogy):
- Adults need to be involved in the planning and evaluation of their instruction.
- Experience (rather than intellect) provides the basis for learning activities.
- Adults are most interested in learning subjects that have immediate relevance and impact to their job or personal life.
- Adult learning is problem-centered rather than content-oriented.
Intuitive Sustained Engagement
OpenPlan™ retirement plan participant communication is based on the “Intuitive Sustained Engagement” model developed by the National Association of Retirement Plan Participants (NARPP). The goal is to present human-centric materials that both engages plan participants and informs them about how their financial decisions impact them now and in the future.
The OpenPlan™ approach is to provide personalized guidance in comprehensible components, such as:
- “Where am I now” assessments
- “Next-best-step” analysis
- “People-like-me” comparisons
We also provide interactive guidance to help plan participants understand and leverage OpenPlan™ resources such as financial calculators, risk-tolerance assessments, goal setting models, strategy builders and action plans.
Our approach is to engage participants in a specific personalized retirement journey. Our initial discovery efforts provide the background and baseline to establish a participant “persona” and engagement track for plan communications. During the participant onboarding process we focus on “Where am I now” messages such personalized estimates of plan account accumulation using current contribution rates, investment returns and earnings increases. As the participant “ages” in the plan we present “Next-best-step” scenarios such as increasing contributions to maximize the employer match contribution or taking more investment risk to increase account accumulation. We also provide ongoing “People-like-me” measurements such as savings checkpoints by age and income.
Every engagement messaging effort focuses on a single action while clearly stating the personal benefit to be gained. We also make sure to provide clear guidance to help the participant to take the action suggested. We provide these action oriented messages throughout the participant lifecycle, allowing the participant to create their own personal journey toward retirement:
- New participant onboarding
- Utilizing plan resources
- Goal establishment
- Managing debt and savings
- Matching goals and investments
- Asset allocation opportunities
- Retirement Readiness status
- Realistic retirement expectations