Missing the Mark With Targeted Communications?

Plan sponsors believe that targeted education works — but a new survey finds that they are not acting on those convictions.

According to the first Not-for-Profit Plan Sponsor Insights Survey by TIAA:

• 68% of non-for-profit plan sponsors believe financial education designed specifically for different age groups or life stages is effective; however, only 33% offer it.

• 50% believe financial education designed specifically for women is effective, but only 14% offer it.

It’s not that they aren’t trying; 81% of plan sponsors offer one-on-one financial advice services, yet 71% say getting their employees engaged in the plan is a significant challenge.

Success ‘Tests’

So how are plan sponsors measuring success? More than half (55%) consider it a significant challenge to measure the success of their retirement plan, but asked about the most important measure of a plan’s success:

• 27% of sponsors cite participation rates, with 52% tracking these rates for their plans.

• 21% say participant income replacement rates/retirement income adequacy is the most important measure, but only 14% track these rates.

Among other success measures tracked:

• contribution rates (46%)

• average account balances (25%)

• participant investment diversification (21%)

• participant data by age groups (20%)

• participant data by gender (17%)

Worried ‘Warts’

Those not-for-profit plan sponsors are worried about their fiduciary responsibilities. Consider that:

• 38% of NFP sponsors worry about meeting responsibilities as a plan fiduciary (including 47% of K-12 sponsors).

• 31% are concerned about the impact of the DOL fiduciary rule (including 46% of higher education institutions).

• 24% worry about criticism regarding plan administrative and investment fees.

Sixty-five percent of plan sponsors have an Investment Policy Statement (IPS) in place to guide their investment monitoring and selection process, and 12% plan to create one in the next 12-24 months. Eighty-six percent report having a plan advisor and of those, 88% report the advisor is a fiduciary.

Plan sponsors report that over the next 12 months they will conduct a formal review of their:

• administrative fees (39%)

• investment menu (39%)

• investment fees (38%)

• plan design (34%)

The survey was conducted by KRC Research from Jan. 18 to Feb. 17, 2017, via a phone survey of 835 plan sponsors in the not-for-profit sector.