Financial Services News

It's hard to read a newspaper or magazine or hear financial news without knowing that individual retirement savings or the lack thereof grab regular headlines. Other headlines focus on the dismal status of many public pension systems. While most county employees participate in defined benefit plans (pensions), the need to supplement that benefit by participating in a supplemental retirement savings program (like the NACo Section 457 Deferred Compensation Program) is critical today and will become more so in the future.

The issue brochure, "Engagement, Communications and Confronting the Information Age Tidal Wave" is available here.

Communicating about retirement readiness and working with county employees to understand their role in saving for retirement is addressed in a recent paper, Engagement, Communications, and Confronting the "Information Age Tidal Wave," released by the National Association of Government Defined Contribution Administrators (NAGDCA). The issues addressed include the challenges of traditional communication, the vast array of new communications tools, and melding these among the generations. The challenge facing counties as plan sponsors is to provide county employees with information without overwhelming or boring them. In addition, the authors state the broad demographics of the county workforce (due to age and education) also point to the need to be appropriately relevant. Plan sponsors as well as the private sector administrators of Section 457 plans are all involved in trying to provide easy access to information as well as information that is easy to understand. Employees will need and want access to plan information when it is convenient for them, delivered through smartphones and tablets. The need to stay technologically current is essential. NAGDCA discusses the variety of communications approaches that deliver plan and investment information: Print media: can be effective but with mailing and printing costs there are, at some point, diminishing returns. Traditional field activities: face-to-face interactions, whether in group or one-on-one settings continue to be popular. NAGDCA asks whether this efficiently communicates with the largest number of employees. Social media and mobile computing: the advantages and disadvantages of a variety of tools Facebook, Twitter, Google+, LinkedIn and YouTube are reviewed. NAGDCA recognizes that "one size does not fit all." The paper focuses on international as well as domestic lessons on effective communications about retirement savings. In the U.S., targeted communication has been effective i.e., for investing for women, targeting young workers or other demographic slices. It is also necessary to match the medium and the message to the correct target audience. For instance, NAGDCA cites a study by the Pew Research Center shows that social networks are used by about twice as many Generation Y employees (in their 20s to mid-30s) as by older Baby Boomers. Pew also noted that Generation Xers (aged 35 to 50) and Boomers are more likely than Generation Yers to get financial information over the Internet. The suggestion from NAGDCA is that technology can be used across all age groups, as long as it used strategically. The bottom line for plan sponsors and providers of these services is:

• Know your audience
• Realize that less is more
• Think like a marketer
• Make the message actionable
• Document the impact
• Most importantly, participant communication will continue to evolve.