PLANSPONSOR - January - February 2024 - 33

PARTICIPANTS
Advice on Advice
I
n 2022, Wright-Hennepin Cooperative
Electric Association began offering
Principal Financial Group's Target My
sometimes
doing
Retirement program, which, among other
things, gives participants the option to
receive an individualized 3(21) fiduciary
asset-allocation recommendation-generated
online after the person inputs some
information such as his risk tolerance.
The participant may implement the advice
or, alternatively, go into a Morningstarpowered
managed account to have the
advice implemented for him.
Enabling employees to get a personalized
investment allocation for their retirement
savings speaks to Wright-Hennepin's
culture as a cooperative that emphasizes
supporting its employees beyond just in
their work life, says Jennifer Severson, vice
president, human resources at the electric
utility, in Rockford, Minnesota. " Providing
this option is helping to give our employees
the ability to maintain their financial
Personalized investment guidance can take many forms
wellness. And
that
means getting in-plan advice, " she says.
The offering is still fairly new,
Severson says. About 5% of participants
have used Target My Retirement to get
the personalized recommendation, and
only a few have opted to go into a managed
account so far. Getting customized investment
advice " is appealing mainly to mid- to
later-career employees, 45 to 55 years old, "
she says of the uptake. " The income level of
the people who have used it tends to be in
the middle range, of $50,000 to $80,000
a year. These are people who are thinking
more about their retirement. Maybe they're
not there yet, but they're getting there. "
A Tiered Approach
Sean Bjork says he can foresee the time
when it will make sense for all plans to
offer at least one way for participants to
receive personalized investment
advice.
But he says that moment has yet to arrive,
Art by Cinta Fosch
because of issues ranging from sponsors'
fee sensitivity to the need for more automated
participant data-sharing to facilitate
customization of portfolios for employees
who choose to provide no data.
" Once we can prove that we can move
the needle on [participant] outcomes with
customization, and we can do it in a way
that is cost-efficient, then that's a win-win, "
says Bjork, who is president of Bjork Asset
Management in Northbrook, Illinois. " We
need to be able to show that value to a plan
committee before they're going to say, 'Yes,
this makes sense, let's do it.' "
Plans will need multiple customization
solutions, to allow participants to
engage to the degree they prefer, Bjork
says. " Within your participant base, if
you look at the average middle-market,
blue-collar operation, there's a wide range
of employee ages, other demographics,
income levels and different preferences
on how they want to engage, " he says. " I
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