Retirement Lingo: Scratch The Jargon


Studies find that retirement plan participants crave more clear communication. Jargon is off-putting for everyone—and especially for Generation Z and Millennials. Industry experts conclude that even small changes can increase clarity, understanding and engagement.

What Did You Say?

A report from Empower, conducted with research from the Harris Poll, observes that terms like “deferral” and “allocation” can be off-putting to employees when considering participation in the company-sponsored retirement plan. As reported by Plan Sponsor:

 When asked for what they wanted in retirement plan communications, respondents to the Empower survey said their desired language would be brief, concise or direct; efficient; simple or easy to understand; informative or educational; relatable; participant-centered; personalized; and engaging or attention-grabbing. For example, instead of “asset allocation,” Empower recommends using “investment balancing.” Instead of the acronym “IRA,” use “personal retirement account” or its full name, “individual retirement account.” Additionally, respondents in the survey preferred “complete financial picture” rather than “holistic financial view,” and “certified financial adviser” rather than “fiduciary adviser.” Thirty percent of participants in the report also preferred that an adviser be described as “a financial professional that must legally act in your best interest.”Participants were also more likely to understand the term “investment balancing,” rather than “diversification,” “asset allocation,” “portfolio distribution,” or “investment allotment.”

Industry experts remind us to have high expectations when contracting with service providers. For example, do your plan service providers excel at giving participants high quality, data-rich information, and education? Don’t be shy about asking for more communication and educational support for your participants. You may also find it helpful to communicate with plan participants about ways in which you, as a fiduciary, work to protect the plan. Make sure, of course, that your ERISA Fidelity Bond is current and appropriately covers the plan. Colonial Surety Company makes it easy for you with our user-friendly, digital, and direct service. Colonial’s unique, efficient and affordable packages arm plan sponsors with: the ERISA bond required to protect the assets of the retirement plan from theft; Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach; and, Fiduciary Liability coverage to protect you and your assets from personal liability as the sponsor.

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 How Engaged Are Your Employees?

Understanding the preferences of employees from different generations will also help you increase engagement in the retirement plan. Although everyone desires jargon-free communication, younger employees value it the most, according to the report from Empower. For example: Sixty-one percent of Generation Z respondents said financial terms make them feel hesitant, while 52% of Millennials, 43% of Generation Xers and 33% of Baby Boomers agreed. When assessing retirement plan communications, don’t make the mistake of counting Gen Z employees out—studies show this age group is especially eager to save for retirement.

Experts advice plan sponsors to look at retirement plan participation rates, deferral rates and personalized rates of return at least annually, if not quarterly. Doing so will help you understand engagement levels and inform plan design and communication strategies to further help participants—and the plan as a whole—achieve end goals. Increasing auto-enrollment deferral rates and adjusting the employer match are two examples of how plan design adjustments might advance plan goals—and employee saving practices.

As a plan sponsor, be sure to also revisit your risk management plans periodically—and make sure that all appropriate coverage is in place and current. For example, in the event a misunderstanding leads to a  plan participant suing, what’s your coverage? Remember, as a fiduciary, your personal assets could be exposed. There’s no need to go it alone. Let Colonial Surety Company help. Just select an affordable, comprehensive package and receive a three point coverage solution:


  1. The ERISA bond required to protect the assets of the retirement plan from theft;
  2. expenses in the event of a cyber breach; and,
  3. Fiduciary Liability coverageto protect you and your assets from personal liability.
  4. Cyber Liability coverage to safeguard your company and plan from covered losses and


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Colonial Surety Company provides user-friendly, digital and direct service. You can easily and quickly purchase your bonds and related insurance coverage online—and instantly print or e-file them from your desktop—or anywhere.

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