PLANSPONSOR - August/September 2021 - 24

2021 PLANSPONSOR NATIONAL CONFERENCE
a money market account. Kacsits said she and her team examined
the lineups, fees, benchmarks and returns of each and ultimately
made the target-date fund the sole default for the entire
participant population.
At ADP Strategic Plan Services, the company switched the
TDF series in its 3(38) lineup after a review last year, taking into
account how participants interacted with the plan. " We asked,
'How are participants looking at funds? Do they have more than
average saved for retirement? Are they more well-paid, or paid
less, than average?' Those things went into our decision [as to]
what glide path is more important, " Buccella said.
After asking these questions, the company found that
participants left the plan after changing jobs or retiring. " A glide
path that went on for 30 years past the target date didn't make
much of a difference, " Buccella observed.
Employers have increasingly been asking about collective
investment trusts (CITs) and stable value funds, due to their
recent outperformance, Buccella said. Stable value funds require
more due diligence, such as reviewing underlying assets and
how the funds are managed, wrap capacity and fees, he noted.
" It's an area where there are a lot of great financial advisers who
can help plan sponsors. "
No matter what investment fund or lineup a plan sponsor
selects, regularly monitoring and annually reviewing fees and
performance is key. Kacsits said the committee at COFCO
International reviews the entire lineup quarterly and measures
how it is performing, including the expense ratio, against its
benchmark.
ADP Strategic Plan Services reviews its funds on a periodic
basis and annually conducts an overall assessment of its investments
as well as what is currently offered in the marketplace,
Buccella said.
Employers should also regularly review a plan's glide path
and document any decisions for the plan, he said. " Looking at it
once is not enough. It should be an annual thing that you put on
the list of 'to-do's in your committee meetings. " -AU
'Communications That Connect'
When plan sponsors send an important message to participants,
they want them to engage. Thanks to behavioral science,
there are some attention-grabbing techniques-discussed in
" Communications That Connect " -that help.
Using " eye-catching " images is a method that has been
successful for Sony Corp. of America, winner of a 2021 Plan
Sponsor of the Year Award, said Judy Leung, the company's
benefits manager. Sony and its plan provider devised a strategy
wherein participants were invited to reimagine, through the use
of such images, what their retirement will look like. By way of
this approach, the company reached a 53% open rate with its
communications and a 15% click-through rate.
" These images were really evocative of an enhanced reality
that we added to the communications, and we found that to
24 PLANSPONSOR.COM August - September 2021
be effective, " Leung said. She noted that Sony and its provider
wanted participants to view their retirement through a personalized
lens and did not want to use typical marketing materials.
" With many off-the-shelf communications, you see a lot
of images with couples relaxing on the beach, but we wanted to
stand out from that and get our participants excited and motivated
with our communications, " she said.
Leung also recalled a campaign, last year, in which Sony and
its provider targeted participants who were fully invested in the
plan's stable value plan design. She noted how her team created
separate messaging for those under age 60 and those 60-plus.
For the younger group, the company sent talking points on
We're taking [messaging] to a level
where everyone can understand
it, and it resonates and
makes sense, to make
sure we're getting
people to a comfortable
place when making
retirement decisions.
-CHRISTINA M. PIHOS
the importance of staying diversified with investments during
periods of market volatility and informed participants of an
upcoming webinar to attend, hosted by Sony and the provider.
For the older group, Sony sent a message addressing
concerns that participants, once retired, often have during a
down market; the message also presented investment principles
to follow and encouraged participants to sign up for the webinar.
As a result, Leung said, these communications received a 35%
open rate and 9% click-through rate.
" It definitely resonated with participants, who signed up for
the webinar and took action after, " she said. " It was very effective
in just segmenting our population and finding the areas where
we can help participants with their retirement. "
Speaking from her own and her team's experience, Christina
M. Pihos, senior vice president, retirement marketing at PIMCO,
said focusing on content and language is important. " Being in
the world of asset management, we like to explain a lot, " she said.
Pihos said positivity plays a large role in behavioral finance
and its effectiveness. Using positive, actionable messaging;
taking each piece of information apart; and being consistent
with messaging will likely lead to higher engagement
rates. " We're taking it to a level where everyone
can understand it, and it resonates and makes sense,
to make sure we're getting people to a comfortable
place when making retirement decisions, " she said.
Additionally, Pihos urged plan sponsors to
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