Harnessing the power of the Internet
How are technological tools helping to educate plan members?

Providing defined contribution (DC) pension plan members with enough information and guidance to make their own investment choices is a major concern for plan sponsors. Many sponsors worry about whether they could be held liable if they don’t meet the minimum standards for educating members. While waiting for the industry to establish guidelines laying out what DC plan sponsors should be doing to educate plan members, a growing number of sponsors are turning to technology, specifically the Internet.

Using Web-based technology, both plan sponsors and members can have access to a wide variety of information related to retirement saving. And according to a survey of 1,000 DC plan members by Toronto-based Morneau Sobeco, the majority of plan members are savvy enough to take advantage of electronic-based information. Almost nine out of 10 respondents said they have Internet access at home and 74 per cent of members who received paper-based information as opposed to electronic-based, said they feel comfortable using the Internet.

Growing in popularity
The wealth of online offerings related to DC pension plans have been growing steadily over the past few years and today’s self-service trend has opened up a whole new dimension for both plan sponsors and members. Major insurance and investment companies have created Web sites where user IDs and passwords allow individual plan members and sponsors 24-hour access to information related to group retirement investments. Simple point and click technology allows easy self-service for changing personal information and even for fund transactions. For plan sponsors, self-service can mean less paperwork and lower administrative costs.

The education factor
But on-line self-management of a DC plan doesn’t meet a sponsor’s fiduciary responsibilities if it isn’t accompanied by an education component. Current Web technology, however, makes disseminating this critical information easy and convenient for users. It’s even less expensive than traditional paper-based information which is costly to update.

What can technology offer in the way of education? Online newsletters and reports about market trends and DC plan funds are typically available in PDF formats which can be downloaded to read on screen or printed. Members can also check the performance of their investments as often as they like. Online resource centres also offer all kinds of information related to retirement including financial planning and tips.

Determining investor profile
Interactive tools can help plan members understand the basic concepts of saving for retirement. For instance, an online questionnaire can help determine someone’s investor profile. By answering various questions related to financial goals, age, annual income and degree of comfort with risk, investors can get a general idea of the type of investments they should be looking at. By using an online retirement calculator, a person can also figure out how much they need to save to receive a certain retirement income and what their plan will be worth at retirement.

For DC plan sponsors eager to ensure that members have access to all the information they need to manage their pension plan, these online resources can provide some comfort. Information that is easy to retrieve, easy to understand and personalized, can help plan members become self-sufficient and more involved with their plan.

Other articles on plan member education:

>	Self-serve still has a ways to go
>	Self-serve retirement
>	Electronic foreign exchange
>	Nothing but net
>	Paperless pensions
>	Techno-benefits

Standard Life is one of the leading providers of Group Savings & Retirement solutions in Canada. The Brendan Wood International Consultant/Broker Reports (1997-1998 and 1999-2000) twice named Standard Life Number 1 overall group retirement provider.

Our Quality & Choice Investment Program offers a comprehensive mix of asset classes, geographical and style diversification from some of the best fund managers in the business. The educational services provided by our fully licensed, salaried Financial Consultants and Financial Representatives offer our plan members the investment guidance they need to achieve their retirement goals. Our secure VIP Room web site allows plan members to manage their accounts on-line and provides plan sponsors with a wealth of plan management and administration tools. Standard Life is dedicated to providing plan sponsors with the highest standards of service in the industry.

For information about sponsoring an educational supplement section contact Paul Williams at (416) 642-4848.