Originally from our sister publication, SmallBizAdvisor.ca.
A sophisticated and well-executed group retirement savings plan can take many shapes and sizes depending on the type of company.
But no matter how many lives are being serviced and no matter what the industry, a plan must have a sound group education component to be truly valuable for employees.
And while it may not be the easiest topic to get across to a less-than-enthusiastic audience, the messages need to be succinct while explaining the company’s philosophy behind the plan and why it’s so beneficial for the employee.
“The reality is that this is a relatively foreign and dry subject for many,” says Drew Prichard, principle with Reuter Benefits in Toronto. “As a result, you have to really engage the people on an active basis for them to absorb the information and then take action.”
To do that, Prichard says you start developing a session by ensuring you understand your company’s culture and the objectives of your plan. Why do you want a plan in place? What are the employee demographics? What’s the basic level of investment knowledge of the group? These details will help you shape the design and tone of the education session as well as how you present the information, he says.
Also, you’ll need to consider the elements of the plan that you need to explain, such as contribution levels, eligibility and the investments available. The way you explain these concepts and the detail you go into will depend on the answers to the questions about the employee group.
After you have thought out what details to cover and how to present it, create an agenda, says Michael Horne, partner with Carleton Financial Group in Ottawa. Be sure to discuss the benefits of joining the plan (if it is a new plan) and an explanation of the investments and services available.
If you’re starting to develop a presentation from scratch, preparation time may take a couple of hours. However, once you have a structure you can use it for future presentations. “We basically have the presentation as a template,” says Horne.
Despite the somewhat templated nature of the presentation, Horne notes that each plan is unique and comes with a certain amount of customization. Things like fee structure, size and demographics of the workforce all play a role in the design of the education session.
When it’s time to run the session, keep it short. “Employers typically don’t want employees offline for a significant period of time,” says Drew Prichard, principle with Reuter Benefits in Toronto and so he generally limits sessions to about an hour at most. Plus, if it runs longer than an hour you risk losing the attention employees.
When it comes to what level of investment knowledge to assume, Horne says that you cannot expect people in the session to be know about retirement plans and savings options.
“For the most part, we get a sense from the owner on what the knowledge of the audience will be and we customize it to that,” he says. Pritchard notes that it’s a good idea to have a “game plan” to explain why it is meaningful for the employee to be part of the plan and understand the objectives of the company.
Know the product
Once basic retirement saving information is explained, the discussion will naturally turn to the products available in the plan. Prichard says it’s crucial to have a firm understanding of the product and not just because you have to explain it to employees. “You have a fiduciary responsibility to ensure the information you are communicating is the facts.”
Be sure to lean on your provider at this point. They may be able to help with materials, handouts, employee websites or even be willing to attend the sessions with you to answer questions.
At the end of the session, be sure to have enrollment information or paper forms available for employees. Make it easy for those ready to act to sign up for the plan right away.
Since time is a premium for most employers and employees, and not all information can be conveyed in a single session, both Pritchard and Horne offer one-on-one meetings following the larger sessions to answer questions not raised during the larger meeting.
Measure success
Both Prichard and Horne have their own ways of assessing the usefulness of the sessions. In Prichard’s case, his firm sends out questionnaires to employees to gauge their level of interest and to evaluate the clarity and content of the message. “It allows us to improve but also gives the plan sponsor that documented trail of how the information was received,” he says.
Horne notes that one way to monitor is by rolling out a first presentation (if possible) and adding in questions and concerns into subsequent sessions. Also, he adds you can look at the investible assets coming in a few months down the road to see if employees have joined and are contributing.
Overall, no matter what you present, it is the responsibility of the member to act. “We’ve given you all this information but your obligation is to take it an act upon it,” says Pritchard.