Shifting to An Outcomes-Focused Communication Plan

Employee Benefit Plan Audit | May 3, 2018 | Holtzman Partners

ERISA requires sponsors of employee benefit plans to send participants a wide range of different types of disclosures. These communications provide participants with comprehensive financial information about the plan, as well as event-based information.

Among these disclosures are a Summary Plan Description (SPD), Summary of Material Modification (SMM), Summary Annual Report (SAR) and Summary of Benefits and Coverage (SBC). Sponsors also must provide certain documents requested in writing by participants, such as the latest Form 5500.

Typically, third-party administrators handle the logistics of sending out these and other employee benefit plan disclosures. But this doesn’t relieve you as the plan fiduciary from responsibility for understanding disclosure requirements and making sure they are met.

Positive Retirement Outcomes

In addition to ERISA-required disclosures, sponsors also send a variety of other communications to plan participants. Many of these communications are focused on various aspects of plan processes, such as how to enroll in the plan, how to make investment selections and other plan mechanics.

Forward-looking sponsors are taking their participant communications a step further by focusing on how participants can achieve positive retirement outcomes. These types of communication plans discuss such issues as:

  • The projected outcomes of retirement savings strategies and behaviors,
  • Future monthly retirement income amounts,
  • The spending power of such amounts during retirement when inflation is factored in, and
  • Successful retirement lifestyles.

The idea behind these kinds of communications is to help participants get a glimpse of what retirement could actually look like for them one day. By envisioning this, participants often tend to be more actively involved in planning — and sticking to — successful retirement saving strategies.

Relating to Retirement

Such an outcomes-focused participant communication plan helps participants better relate to retirement, which can be a vague concept for many people, by showing them the “rest of the story,” so to speak.

One of the best ways to accomplish this is to feature retirement saving success stories in your communications. When participants can see that real people just like themselves have met their retirement savings goals, it can give them some extra motivation to stick with their long-term savings plan.

Outcomes-focused communications should also be positive, optimistic and action-oriented while reinforcing successful savings behaviors. These typically include things like increasing contribution amounts regularly, making extra contributions whenever possible, and staying invested even in the midst of market volatility.

In addition, your communications should encourage participants to meet with a financial advisor regularly to review their account balance and progress toward their retirement savings goals. This is similar to an annual health checkup where a physician checks vital signs such as your blood pressure, cholesterol level and heart rate.

These kinds of regular (such as annual) retirement plan checkups help participants spot potential obstacles that could hinder progress toward their goals and make course corrections to keep their plans on track.

Multiple Communication Platforms

Plan participants today consume content across a wide range of different types of media, including print, online and mobile platforms. So as you design your participant communication plan, be sure to take advantage of all the different communication channels available to you.

For example, publish outcomes-focused materials in your employee newsletters (both print and electronic), on your company intranet and in materials distributed to participants for consumption via smartphone or tablet.

Win-Win Communications

Shifting from process-based to outcomes-focused participant communications can be beneficial to both your company and your employees. Talk to your senior managers and third-party administrator about what an outcomes-focused participant communication program might look like at your organization.

Please give our Employee Benefit Plan team a call at 512.610.7200 if you would like to discuss your participant communication programs in more detail.

Our team provides the technical experience and industry depth that your team can trust.