This is Part 4 of our 6th annual survey of CAP members.
Read Part 1: Engaging employees
Read Part 2: Increasing understanding
Read Part 3: Managing expectations
From social media to mobile apps, there are many emerging communication channels for CAP sponsors. But if you build it, will your plan members come?
Despite a growing number of options, the majority of plan members surveyed still prefer face-to-face meetings and hard-copy printed materials. But while some plan sponsors may not be ready for mobile or social media tools, they may become the channel of choice for the online generation.
Today, a solid majority (75%) of plan members are satisfied with the frequency of communications regarding their employee retirement savings plans, and 77% are satisfied with the content of the communications. Although these satisfaction levels are fairly high, 54% of plan participants rate both the frequency and the content of communications as only “somewhat” satisfactory.
That finding is concerning to Jamie Farrell, senior manager for benefits and investment programs with Rogers Communications. “They know we are doing something, but it is not good enough,” he says. “I think the challenge is, although we tell DC plan members to choose and manage their own investments, they are still looking for the employer to be a partner in the decision-making process. Our biggest opportunity is to change the conversation from talking about tactical details—such as how to enrol, how to change investments and how to name a beneficiary—to how we can help them make the right choices to meet their retirement goals.”
Those who are dissatisfied with the frequency (25%) and the content (23%) of the communications were asked what improvements they’d like to see. While 21% said “nothing” or “don’t know,” nearly one in five (17%) said that more information/information sessions would improve the communications. The same number (17%) said more frequent communication. Fewer than one in 10 (8%) would like monthly or quarterly statements, 8% want better communication, 8% suggested that newsletters/updates/memos would be an improvement, and 8% would like email notifications. Women were more likely to mention that providing more information/information sessions would help to improve communication (22% versus 14% of men), while men are looking for more frequent communication (18% versus 14% of women). Younger plan members (27%) were significantly more likely to point to information/information sessions than their older colleagues.
Whether plan members are going to a personal financial advisor, a bank or financial institution or an employer, in-person meetings are by far the top means of access. Older plan members were far more likely to report accessing a financial advisor through in-person meetings than the youngest members (92% versus 75%). Other means of access included telephone calls, email and websites.
Unfortunately, fewer CAP members seem to be using the services and tools available to provide information about employer-sponsored retirement plans. In 2008, 72% of members said they reviewed all retirement investment statements during the year, but that number dropped by more than half to 35% in 2010, and to 33% in 2011. Only 32% (compared with 45% in 2009) said they went to a website to review their account balance or other retirement plan information, and 18% (compared with 26% in 2009) used online or hardcopy retirement planning calculators or tools provided by their employer or plan provider to make investment choices.
While 20% say they consulted a personal advisor regarding their employee retirement plan (the same as last year), the percentage who attended educational sessions on employee retirement investment options fell to 16% from a high of 26% in 2007, and only 9% sought out advice from employer-provided advisors for their investment choices—down from a high of 24% in 2007. And fewer than one in 10 (9%) contacted the call centre for information or advice regarding their employee retirement plan, a drop from 20% in 2008. Overall, while close to two-thirds (64%) of members took at least one of these actions in the past year, about one-third did nothing.
Another disturbing finding is that 25% of plan members surveyed say their employer doesn’t provide any information about the employee retirement plan. “I find this disconcerting,” says Stephen McGregor, business development manager, national accounts, with Desjardins Financial Security. “It could mean that they don’t remember what they got, or they didn’t pay attention; we aren’t really sure. But what it does tell us is that if plan sponsors don’t do a good job promoting the plan, then they may as well do nothing—because, frankly, that’s what some of their members think they are doing.”
The remainder cite a wide range of communication tools and services: printed manuals (30%), toll-free call centre (26%), printed newsletters (20%), retirement plan information on an investment company website (20%), website retirement planning tools and calculators (19%), retirement plan information on an employer website (18%), education sessions during work hours (17%), a company-provided financial advisor whom they can contact free of charge for advice (14%), e-newsletters (9%) and education sessions after work hours (7%).
“Traditional channels of communication still trump everything else,” notes Janice Holman, a principal with Eckler Ltd. “People still want to be hand-held, they want to meet in person, and they want hard copy so they can refer to it later. So I’d tell plan sponsors not to get too caught up in trying to reinvent what is already there—just find a better way to market what is there and make sure it is effective.”
Although newer forms of communication are rapidly gaining ground within the general population, they haven’t necessarily caught on yet in the CAP industry. The survey results find that employers rarely offer these communication tools: webcasts/webinars (2%), online videos (2%), Facebook pages (1%), mobile applications (1%), blogs (1%) and LinkedIn pages (1%). And less than 1% of plan members surveyed mentioned Twitter and YouTube video links.
Of the small number who reported having social media options available for their employee retirement savings plan, nearly half (48%) said they haven’t used them. Among those who did, the most popular option was LinkedIn (36%), followed by Facebook (28%) and Twitter (7%). Men (69%), younger plan members (64%), those who have been in the retirement plan for less than a year (79%) and those who’ve been in the plan for six to 10 years (83%) are more likely than others to use the social media options available to them.
When it comes to mobile technology, nearly one in five (18%) plan members say they use applications for mobile devices to access their investments or other financial accounts, though 5% of those say they don’t feel comfortable doing it. Another 17% indicate that they don’t currently use mobile apps but they’d like to. Still, the majority (65%) of plan participants report that they do not currently use this option—nor would they like to. Once again, a larger percentage of younger plan members (30%) indicate that they use their mobile device to access their investments or financial accounts. The proportion decreases with age, from 14% among those ages 35 to 54 to just 9% among those age 65 or older.
The youngest plan members have a more favourable opinion than others on the role that social media could play as a CAP communication tool. They are more likely to feel that YouTube (23% versus 14% for all ages), Facebook (30% versus 18%), LinkedIn (13% versus 10%), Twitter (17% versus 9%) and blogs (26% versus 17%) would be useful for providing information about employee retirement savings plans. But the majority (57%) of all plan participants say that social media shouldn’t play any role in providing information or education on their retirement savings plan.
“Using social media as part of a retirement plan’s strategy may seem like an interesting and fun idea, but clearly, the results reveal that members don’t even see the point,” says McGregor. “Rather, the closer a person is to retirement, the more they want their information delivered in person—and I don’t think this is going to change in light of new technologies.”
“I think we will be watching this to see what happens over the next couple of years,” says Virginia Alderman, director of communications with Manulife Financial. “Looking at the social media options, the definitive phrase is ‘not yet’ since this is still very new. But one important trend we see right now is a tremendous request for tailored information. Members want information when they need it, in small, palatable pieces. So if it is bonus time, for example, this is when sponsors can be sending an email or instant message to say, ‘Hey, check this out.’”
Support for social media may be weak right now, but plan sponsors can’t simply dismiss the new technology, insists Jennifer Mayrhofer, manager, group retirement savings marketing, with Great-West Life. “There are so many variables to consider with this media, and it’s changing rapidly. Recordkeepers can help plan sponsors meet their multi-channel communication needs by providing content suitable for digital channels. Employers may find that social media offers one more opportunity to have a conversation with certain segments of employees about their group retirement plan.”
Get a PDF of the 2011 CAP Member Survey.