How to convert a disclosure requirement into a communications solution.
It’s that time of year again—time for plan sponsors with a December 31st year-end to make sure their annual pension statements are safely delivered into the hands of eagerly awaiting (or not) plan members.
The problem is that most plan sponsors still view the requirement to provide annual statements as an ill-conceived administrative headache. Even worse, there is a lingering misconception that it’s in the plan’s best interests to save money by satisfying only the barest minimum disclosure requirements.
All too often, the result is an administrative solution to what is, in fact, a very rich communications opportunity. Yes, you might be able to save money by producing statements that do little more than satisfy the letter of the law. But chances are those statements won’t be effective as a communications vehicle.
In surveys, plan members consistently rank annual statements as their number one preferred source for pension information. This is true across industries, income, ages, gender and even geographic boundaries. And why not? Statements contain personalized, timely information about three key issues: me, my benefits, and my future. From a communications standpoint, it doesn’t get much better than that!
But the same research also shows that members are often dissatisfied with their statements, for a number of reasons:
• Information is often delivered in the wrong order.
• Important content is frequently “buried” somewhere in the document.
• The wording is typically technical and full of jargon.
• There is little or no effort made to enhance the information through the use of colour, charts, graphs or other visual exhibits. (Imagine if your favourite magazine were published without pictures, colour or suitable type.)
• Finally, more and more plan members are looking for electronic rather than traditional paper-based statements.
• Present the information in the order readers want it. Typically, “How much will I get?” and “When will I get it?” make for good openers.
• Simplify and, where necessary, expand the wording to add clarity. Remember, “simple” doesn’t always equate with “short.” Some concepts beg a few words of explanation. And the legalese needs to be translated into everyday language.
• Use graphics and layout to promote readability and understanding. The judicious use of colours, tables, charts and other graphic exhibits can significantly improve reader comprehension. As the saying goes: A picture is worth 1,000 words. Many members will absorb information faster and retain it longer if they can “see it” rather than “read it.”
• Harness your membership data to simplify and personalize your messages. Why set someone up for disappointment by describing valuable early retirement provisions they’ll never qualify for? Or why add an unnecessary layer of confusion by explaining spousal benefits to a single member? Today’s technology allows us to generate highly personalized statements that provide members with customized plan descriptions and benefit summaries driven by personal data and circumstances.
• Leverage your statement to explain key plan provisions, clarify how the plan works, and reinforce key administrative messages. The statement is an ideal platform for elevating plan knowledge.
• Use the preferred medium for the audience in question. If members want to receive their statements electronically, why not give them that option?
Given that the requirement to provide member statements is not about to disappear any time soon, smart plan sponsors will exploit it. Ask your members what you can do to make their statements more valuable to them. You may find that even a small investment will pay big dividends.