During Benefits Canada’s annual DC Plan Summit, plan sponsors participated in interactive sessions. They split into small groups and were given questions to discuss. Based on these discussions, moderators later offered their insights and relayed key take-aways.
Michael Ondercin, assistant vice-president, product marketing for group retirement solutions with Manulife Financial shares the best ideas from the question he moderated: What are the best ways to provide financial advice to employees?
Plan sponsors used about 10 different words to describe advice and what that actually means. It’s not advice; it’s support. It’s not support; it’s really information. It’s not information; it’s guidance. We asked plan sponsors what kind of advice members are looking for. Their responses varied from should I contribute to the plan or not, to the fund lineup and picking funds, and setting the retirement income that seems realistic. One perspective was as follows: “That’s not the role that we play. We don’t provide advice to our members; we give the information. It’s their choice. We don’t want to take on the risk.” And about half the group said, “No, we’ve evolved past that—we’re now focusing on helping the members.”
Call to action:
- The more you can simplify the plan design—offer auto-enrollment and auto-escalation, and offer TDFs as the default—the better.
- When you’re going to offer an education or advice program, make sure that it’s targeted. Plan sponsors had a lot more engagement when it was specific to a particular demographic or age cohort than if they did a general education session.
- Focus on the members approaching retirement. These members have the most questions, and they’re the most anxious.
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