New Years resolutions are still a few weeks away, but employers already have one regarding their retirement plans — improving communication. Most employers sponsoring defined contribution plans — including 403(b) plans — that Towers Watson spoke to in its 2014 North American Defined Contribution Plan Sponsor Survey said they plan to do more to educate and inform employees in order to heighten employees’ knowledge about retirement planning and their readiness.
The survey suggests that the time may be ripe for such increased commitment to communication and education. Not many employers — just 12% — said that their employees knew how much to save. Not even a quarter of them strongly agreed their employees were comfortable making investment decisions.
Employers already use multi-faceted efforts to accomplish this:
- Account statements: 62%
- Email: 27%
- Investment advice: 22%
- Newsletters: 22%
- Online education/webcasts: 22%
- Managed account services: 17%
- Group meetings with participants: 16%
- One-on-one meetings: 14%
Towers Watson notes that these are passive forms of communication. It adds that employers may find that more active ways of communicating — such as mobile apps and gamification — may be more effective since they better engage employees and may better change behavior. Nine percent of employers in the survey said they use apps; even fewer, 8%, use gamification.
A strong majority — 84% — plan to do more to educate employees about saving and investing for retirement. But that may not necessarily be in 2015 — they said their heightened activity would take place in the next two to three years.
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