Nicholas Zaiko, CIMA®
Bridgebay Financial, Inc.
The best way to implement an effective education strategy is to create an Education Policy Statement that establishes an overriding framework for deploying and measuring the effectiveness of participant communications. The process of formally documenting the strategy in a policy statement helps ensure that the program will be focused, effective, and quantifiable.
By establishing specific goals in the policy, educational campaigns can be more easily assessed and positive results measured against identified criteria. The process of creating the policy turns nebulous notions of improving participant financial literacy into specific, discrete goals that can be used to guide the educational efforts of the program.
An Education Strategy guides the development of ongoing participant communications and education. The strategy focuses on specific demographics or employee segments that need targeted education and messaging. The strategy should identify specific types of desired results and include a calendar for delivering the education, milestones and how the program’s success will be measured.
An Education Strategy can document the objectives of the education program, content of the educational meetings, webinars, seminars, topics to be covered, and feedback or survey results. There are several plan statistics that can be helpful in identifying areas for improved participant communications which include participation rates, average deferral rates, asset allocation among funds, and average participant balances. All of this data can be provided by the recordkeeper and sliced by age, income group or geographic location. Different savings patterns can be further evaluated by employee salary levels, divisional location, experience level and age. These statistics, supplemented with employee surveys, can be utilized to identify certain populations of employees that face similar challenges in retirement plan savings.
Once some of the challenges have been recognized, relevant goals, objectives, action plans and an education program can be developed to achieve stated goals.
A well designed employee questionnaire or survey can be instrumental in identifying misconceptions about the retirement plan, employee benefits and areas of interest to employees. The results of this survey may highlight areas for increased participant communication and educational needs.
Plan sponsors can also benefit from industry data available through the recordkeeper and plan advisor that compares the plan to peer groups with similar workforces. These industry surveys and benchmarking studies can be helpful in designing the plan and the communications program to enhance participant satisfaction and employee retention.
Different measures of success can be used to establish specific goals. Some typical milestones include increasing participation levels among a specific demographic, growing balances among certain salary levels, increasing contributions for participants stuck at a low percentage, broadening overall savings, improving asset allocation for participants in one undiversified fund, or improving personal returns.
Determining the Goals
The Education Strategy should focus on the issues or communications gaps that must be addressed. Not participating in the retirement plan, inadequate deferral rates or excessive loan taking can all be areas for further education. Employee groups to be targeted with specific educational topics can be prioritized in the annual education plan.
The communications objectives should be stated to provide a clear message in the educational campaign. Document the education campaigns to be delivered for the year by topic, targeted group, frequency, and delivery method. Establishing an annual communications calendar that highlights the specific schedule for the various educational programs is critical for a well-orchestrated program that is measurable and repeatable.
Finally, define the annual goals and objectives and how they will be evaluated and measured. This is an opportunity to define the key metrics to be used to monitor the plan’s effectiveness and identify areas for modification.
Means of Delivering Education Program
The methods by which the education will be delivered is an integral part of the strategy and planning process. The use of in-person small group sessions, webinars, seminars, online tools, and participant feedback should be part of the annual plan.
The sequence of educational topics for the general audience as well as more targeted communications for specific employee demographics is important. Certain topics may address the unique financial wellness and planning for women while other topics may be more relevant to young parents or recent graduates or new hires. The topics should be segmented by stages in life and unique needs.
Topics to Be Presented
The education strategy should have a process for the review of all educational materials to be presented to the participants to screen for sales pitches or other services that would be a conflict of interest. The annual plan should include a list of presentation materials that have been reviewed by the plan sponsor in advance for relevance and educational value.
Measure Milestones and Education Success
Metrics for measuring the success of specific educational campaigns should be established in advance and should be used to evaluate the factors that contributed to the session’s success or help explain why the program missed the mark with participants. Later sessions can be modified to absorb the feedback from participants. By setting expectations in advance, results can be measured to determine the effectiveness of the program and set standards for future improvements.
The effectiveness of a program can be measured by changes in participation rates, deferral rates, fund changes, or increased usage of service provider services following an educational program. Follow up may also include a participant survey which can provide actionable information.
Educational programs should be developmental and sequential. They should target different participant groups by topic and interest. Simply providing introductory and enrollment meetings does not educate participants nor do they gain financial literacy. Educational plans should provide a foundation upon which to progressively build the participants’ knowledge of financial topics that are relevant to them.