How analyzing big data can help with pension engagement

As plan sponsors grapple with improving engagement around capital accumulation plans, analyzing big data is one way to help employees make the most of them.

“Big data allows us to pinpoint where members are on the engagement spectrum,” Karrina Dusablon, national vice-president, business development, group retirement savings at Desjardins Insurance, told attendees of Benefits Canada’s 2016 Benefits and Pensions Summit last week.

She said that once employers get the information, they can zero in on plan members who need assistance through personalized e-mail campaigns.

Read: Communicate by cohort to grab members’ attention

The comments arose during a panel discussion on the results of Benefits Canada‘s 10th annual CAP member survey. The results demonstrated the challenges plan sponsors face not only in regards to engagement but also the disconnect between employers and their staff when it comes to their views about their plans and retirement.

The responses of 1,000 plan members across the country showed that on the one hand, plan members appear to be viewing their plan in something of an amber glow. But at the other end of the spectrum, plan sponsors, which have a better handle on where things actually stand, are worried about the future.

When it comes to their financial readiness for retirement, “56 per cent of plan members are feeling comfortable,” said Dusablon. But “we definitely see there’s a total lack of understanding ranging from all the different aspects of retirement planning, whether it’s longevity risk, whether it’s rate of return.”

Read: Understanding the decumulation dilemma: 2015 CAP member survey

According to the survey, 56 per cent of employee respondents reported they “somewhat” or “strongly” agree they feel prepared for retirement. Some 86 per cent are happy with their plan. They’re also optimistic about their expected rate of return, with the majority of respondents saying they expect a 15-per-cent rate of return.

On the other hand, only 46 per cent of employer respondents said they feel their members are retirement ready. And the actual rate of return is 13.7 per cent, not 15 per cent. Plus, they’re concerned about survey findings that indicated 41 per cent of plan members feel it’s the employer’s job to ensure plan members have adequate funds for retirement while 57 per cent of them feel the employer is on the hook for sound investment of retirement funds if they fail to take an active investing role. Some 65 per cent of employer respondents are worried about being sued if they fail to make sound investing decisions for their members.

Read: How employers can help employees in retirement

“Obviously, sponsors are struggling with this issue,” said Rod Smith, director, client services at Great-West Life, during the panel discussion.

Smith suggested plan sponsors need to reach out to their members at least three to five years before retirement in a targeted manner. That could include appealing to female employees — who indicated in the survey that they’re less comfortable with investment concepts — or education programs that boost awareness about rates of return.

Clark Steffy, regional vice-president, sales, Ontario, Atlantic and Western Canada for Industrial Alliance, said legislative change needs to come in before plan sponsors feel safe enough to take a more aggressive educational role. “I think there’s a real opportunity there but I don’t think that will be solved until safe-harbour legislation comes about,” he said.

Read: Raising the bar on pension plan governance