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 when 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 were:

  • 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; 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.

Add Your Comments

One Comment

  1. Charles Miller
    Posted April 21, 2017 at 12:04 pm | Permalink

    It’s a matter of personality, not education. Most will never be engaged. It’s why auto features and TDFs
    /Managed Accounts have mushroomed.

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