Nicholas Zaiko, CIMA®
Investment Consultant
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.
Getting
Started
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.
Employee
Surveys
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.
Setting
Goals
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.
