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© Copyright 2000 Rogers Media. The following article first appeared in the October 2000 edition of
BENEFITS CANADA magazine.
Self-serve retirement
Self-service electronic tools make employees more active and better educated participants in their
retirement savings plan. They also help employers fulfil their fiduciary responsibilities.
By Lynne Parisien
There are many advantages to the self-serve, interactive approach to plan education. Some of them can be
summed up in the words of Confucius: "Tell me and I will forget. Show me and I might remember. Involve me
and I will understand."
Self-service access tools such as employee-focused Web sites benefit both plan sponsors and members. They
help employers meet their fiduciary responsibility by offering valuable information about the plan as well
as the freedom to make changes to it. Employees can also use these electronic tools to gain a better
understanding of their plan and investment options.
In addition, all of the information employees need can be accessed at any time, from home or at work. This
accommodates individual learning needs and schedules, while allowing employees to take more control and
responsibility of their retirement savings and investment decisions.
Recognizing the trend toward employee empowerment, more organizations are starting to put the
responsibility for personal retirement management into the hands of their employees. In a self-service
environment, the member chooses the information that they want to access as opposed to a provider
controlling the distribution of information.
While communicating change doesn't necessarily create the shift in attitude needed to motivate employees to
take a more active role in retirement planning, self-service electronic tools give workers the required
skills, information and interest to access information contained in their plan.
Offering these tools also strengthens the employer-employee relationship. It creates a partnership and
contributes to plan members' learning experiences.
To become self-sufficient and appreciate the need for education, employees require:
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Information. General background information on sources of retirement, advantages and limitations of the
plan and their investment options.
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Awareness. Employees start to recognize the benefits of learning about the plan and its options and
become more receptive to taking responsibility for their retirement.
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Understanding.Employees gain a better understanding of how government programs and company-sponsored
plans might change and affect their investment selections.
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Call to action. Enrolment materials and online personalized messages encourage employee participation.
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Reinforcement. Employees need regular reinforcement of retirement concepts and updates to their plan.
Measuring the level of comprehension, use of self-service access tools and level of participation in the
plan will also help employers determine if workers need additional assistance or if the information being
provided needs to be revised.
Some companies don't implement self-service tools due to concerns over whether or not employees have the
skills to use them. However, Canadians are becoming increasingly comfortable with using the Internet.
According to a recent survey conducted by TWA Research, almost 50% of Canadian households have a least one
member with access to the Internet, and four out of 10 Canadians over 18 years of age currently have
Internet access.
When online information can be easily retrieved and it's presented in a clear format, employees will
quickly find answers to their questions and become more self-sufficient.
Employers want to be hands-off on day-to-day administration. But like their employees, they need tools that
will allow them to access and change information.
Self-service tools allow both parties to interact with their provider on a real-time basis. Special
features and services that are interactive in nature will involve employees in the learning process, which
might include calculating plan value at retirement or the advantages of tax-deferred investments.
If employees input their own real-life scenarios, they'll be more inclined to follow the course of their
investments and better understand how their company-sponsored plan fits into the big picture of their
retirement. This will help boost participation in enrolment sessions. And if employees are comfortable with
interactive tools, they'll talk to co-workers about them. Word of mouth is a powerful communications
vehicle and it's often overlooked.
Self-service tools position the organization as a party that cares about its employees' future. It also
sends the message that the employer is available and willing to understand members' needs and offer
solutions. In addition, an online communications system cuts down on paperwork and administrative costs.
ELECTRONIC ENVIRONMENT
Many plan sponsors that are committed to safeguarding their employees' personal financial information use
interactive tools. The electronic environment can actually prevent fraud and enhance protection. However,
it's important to select a provider with a business conduct code. This will ensure that personal
information collected from employees is accurately matched to their customer records, verifies their
identity and protects them from system error and fraud.
As employees become increasingly familiar with investment options and retirement planning, both employers
and workers will become more demanding in the service they expect from their providers. Part of that
service includes having interactive tools at their disposal.
Employees need to understand how their company-sponsored plan can help them achieve their own retirement
objectives. Putting plan information in their hands allows them to take ownership of their benefits, become
better educated consumers and wiser investors. As they begin to grasp the basic concepts of saving and
investing with the help of these tools, they'll want to become more involved in their education and the
plan.
Organizations clearly recognize the importance of the Internet and the impact it will have on their
business. More companies are logging on to the Web than ever before. In February, 77% of Canadian
businesses were online compared to 54% in April 1998, according to the TWA survey.
A cutting-edge Web site that effectively meets employees' needs will differentiate an organization from the
competition. Offering this service creates an additional benefit for plan members and increases the
participation level in the plan and other benefits.
Online services also enable companies to address current issues in a timely manner. This includes
communicating important changes to the plan as soon as they occur, regardless of plan member location.
TRADITIONAL COMMUNICATIONS
Although technology provides employees with an efficient way to learn about their plan online, some plan
members will occasionally want to interact with a company representative over the phone, through e-mail or
in person. And while some people learn quickly online, others will respond better in a one-on-one education
session or with printed materials. An efficient communication strategy encompasses various media.
However, self-service access tools are the fastest way to make timely, accurate information available to
employees, regardless of where they're located. They are also an important component of an effective
education program, which builds loyalty and appreciation.
Employees who are active participants in their own education process are more motivated to continue
learning about the organization's plan and its options. This helps plan sponsors explain fees associated
with the plan, and helps employees compare these expenses with the cost of the benefit.
If your organization decides to implement self-service access, proceed carefully. Employees need to have a
full range of services, along with the ability to directly access or change personal information. This
might include changing investment direction, transferring money between funds or accessing fund rates and
values.
Engaging employees in the education process will go a long way in enhancing the employee-employer
relationship. At the same time, it will demonstrate the organization's commitment to ensuring that the
changing needs of its employees will continue to be met.
Lynne Parisien is a communications specialist for group marketing communications, Clarica Life Insurance
Company in Waterloo, Ont. lynne.parisien@clarica.com.
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