A recently study of nearly 2,500 adults points to what is well understood intuitively: people have messy feelings about retirement, and this makes it challenging to target communications and information about retirement savings plans. Although responses vary based on age and other personal factors, there are a few clues about what messaging works best for most retirement plan participants.
Knowing It Is Possible
Reporting on new research from the Capital Group, 401k Specialist Magazine shares that generally, participants prefer messages focused on outcomes, like “knowing that it’s possible to live the life I want in retirement,” over messages that focus on learning or getting started. Additionally:
Planning statements that position the individual at the center of the discussion around retirement, and enjoyment messages, were more appealing and likely to encourage action than negative language such as warnings of potential mistakes, or prevention messages. “One of the most common mistakes” was the least preferred message, with 58% of respondents reporting they did not associate it with feeling more confident and 55% saying they did not associate it with wanting to save more….“The research revealed that people can have messy, mixed and deeply personal emotions about retirement,” said Toni Brown, head of Retirement Strategy at Capital Group….“At the same time, investors seem to want to know the pathway to retirement is doable, worth it, and in their control.”
Of course age influences some of the messaging preferences of retirement plan participants. For example, Gen X investors, find “saving smarter for retirement,” appealing, since they want to make sure their money is working hard for them, but Baby Boomers find this type of communication “patronizing or condescending.” When it comes to engaging retirement plan participants, the right image matters a lot, across the board:
50% of total respondents approved of images including scenes of people helping one another, and 47% of respondents liked pictures with images of planning, including people working on computers or tablets, or meeting with advisors. Images showing senior individuals receiving healthcare or navigating obstacles appealed to 44% of respondents; pictures with growth on charts, or even metaphorical growth like plants or planting reached 41% of people; imagery with social enjoyment appealed to 35% of respondents; and images showing people learning, practicing a skill, or depicting self-improvement was approved by only 28% of survey respondents.
Across the country, plan sponsors are working hard to engage participants in maximizing the benefits offered by the company sponsored retirement plan. While doing so, it’s important for plan sponsors to protect themselves, the company and the plan. Even with great diligence, mistakes happen and under the high standards of ERISA law, an error, oversight or misunderstanding can result in a costly fiduciary breach allegation. The IRS also reminds plan sponsors that selecting and monitoring individuals or companies to provide services, including communication and education, are fiduciary responsibilities associated with plan sponsorship. Colonial Surety makes it efficient and affordable for the sponsors of plans of every size to secure a Fiduciary and Cyber Liability insurance Package that includes:
- Legal defense and coverage for penalties against claims of alleged or actual breaches of fiduciary duties.
- Defense against lawsuits and regulatory actions related to a cyber breach.
- Expert-led response, notification and crisis management services to prevent a cyber incident from spiraling into a disaster.
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Good To Know
Research from the Capital Group reveals some overall preferences of plan participants related to the imagery show in retirement plan communications and plan sponsors will find it useful to keep these front and center when reviewing the materials used with plan participants:
- Diversity of race and ethnicity as well as life stage and work setting, including retired singles, younger people and those working non-traditional jobs
- Portraits of retirement as a physically active time with a broader depiction of retirement activities
- Images of technology. Universally, respondents liked seeing the technology they use in their daily lives, such as tablets and smartphones
- People actively working in retirement as retirees are increasingly choosing (or needing) to pursue part-time work in retirement
Employees have high expectations for the retirement plan—and so does ERISA. Plan sponsors are advised to keep in mind that change filled times—and dissatisfaction—contribute to increases in allegations of fiduciary breaches. Available with just a one year commitment, Colonial Surety’s fiduciary and cyber liability insurance package covers defense costs and penalty limits up to $1,000,000, if faced with claims of alleged or actual breaches of duty in connection with the employee retirement plan. Because a cyber breach can quickly spiral into allegations of a fiduciary breach, it’s critical for retirement plan sponsors to have both cyber and fiduciary liability protection. Colonial makes it so efficient and reasonable that you can secure your protection in minutes now:
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