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Most Helpful Participant Education Topics?

Byline: Rebecca Moore

Summary paragraph: Many years ago, retirement plan participant education included only information about plan features and maybe two illustrations of typical asset allocations for individuals, based on age.

However, investment menus have become more complex and, after a few recessions, that may have taken a chunk out of plan balances. Plan sponsors now realize that for participants to save more, they need good financial education to teach them how. PLANSPONSOR NewsDash readers were asked what topics are addressed in their participant education materials and meetings.

Other than information about plan investments (96.6%) and plan features (93.1%), the two most covered topics cited by responding readers are basic investing concepts (79.3%) and how to calculate how much retirement income is needed (69%). Nearly half of readers (48.3%) cited appropriate savings rates and investments, and more than one-third (34.5%), information about creating retirement income.

Thirty-one percent mention ideas for changing spending habits, 24.1% discussions on creating a budget, and 20.7% debt reduction. Only one in 10 readers (10.3%) indicated they are instructed about when and how to claim Social Security, and 3.4% receive education about how Medicare works.

Keeping education simple was a theme among the few responding readers who wrote in comments, and some shared ideas. (As always, verbatim responses reflect the opinions of individual readers and not the stance of PLANSPONSOR and its affiliates at Asset International.)

"Retirement is not all 'about the money.' We need to provide ways for individuals to discover meaningful activity for the last one-third of life, and it could very well include a career switch. The 'endless weekend' concept is literally a killer."

"Workshops offered throughout the year on a variety of topics, as well as educational pieces in payroll inserts and educational articles in newsletters and via email blasts."

"How to get in the plan, how to get out of the plan and how to invest-the simpler the better."

"Budgeting, reducing debt and spending habits are handled in separate employee financial education programs-not within the retirement education."

"In the past year, we have brought in attorneys, investment people and retirement planners to provide information to all of our staff. We have videotaped their presentations and have put those videos on our intranet."

"Need to get them to understand [that] the earlier they start saving, the better. And with pretax deferrals, they may not be losing out of each paycheck as much as they think: They are basically paying themselves first, Uncle Sam second!"

"We are spending much more time starting with the end in mind. We use online tools to show them what percent of pay they really need to be [deferring] to have their idea of a comfortable retirement. We don't spend much time on the investment options, as we have found that people are not as concerned about how they get there-they just want to get there."

"As for things like debt counseling, budgeting, etc., I'm sure there are employers out there who do that and who have the time and can commit the resources to doing so. We can't. And, fortunately, don't seem to need to. What an indictment of our society and education system that those basic tenets of financial acumen have to wait for people to show up at work!"

And the Editor's Choice goes to the reader who entertained me with "song": "Still in the shallow end of the education pool/ Leery of 1-800-Call-Shark/ So, we're: ABC, easy as one, two, three/ Simple as do-re-mi, protectin' the com-pan-y/ So, 'ABC' is all you'll see, yeah."
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Date:Sep 1, 2013
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