PLANSPONSOR - June/July 2018 - 45

he says. For example, most employers with an auto-escalation
feature still have to keep track of the escalation's upcoming effective
date, then go into the payroll system and add the 1%, or whatever
the auto-increase is, to the deferral of each auto-enrolled
participant. " That creates inefficiency and all kinds of opportunities
for errors, " Hanna says.
4
Participant-Engagement Savvy. " Forget about the
retirement readiness calculators for participants: Virtually
nobody uses them, " Brummel says. " Those are just shiny objects
off in the corner. " Consider instead whether a recordkeeper
integrates retirement-readiness calculations into the participant
website log-in, he says. Does the recordkeeper calculate an
individual participant's projected monthly income in retirement
and display the projection prominently on the person's log-in
page? " You have to do the math for participants and project what
the participant needs to see: 'How much income am I on track
to have on a monthly basis, based on my current retirement
savings?' " he says.
Hanna is asked where there is meaningful differentiation
between recordkeepers today in terms of participant engagement.
" It's less about the actual tools and the look of the recordkeeper's
participant website and more about how the recordkeeper
supports the employer and adviser in driving participants
to those tools, " he says. Some recordkeepers can do text
alerts to participants' smartphones that have a link to a helpful
tool on the website, for instance. And some providers have the
capability to send participants emails with an embedded video,
and from the video a participant can click a link to take action
such as to sign up for automatic increases. " It's about driving
participants to the tools and then making it easy for them to
" Payroll
integration
should be
a real driver
of selection
for sponsors
but often
isn't. "
take action, " he explains.
Effective
5
Financial
Wellness. Some recordkeepers
and advisers offer
only an off-the-shelf financial
wellness program, while
others will semi-customize
the program for the particular
employee group, Brummel
says. " Many of the financial
wellness programs offered are
'vaporware': They sound good,
but they don't really move the
needle on participant outcomes, " he says.
Adviser Michael Kane, managing director of Plan Sponsor
Consultants, in Atlanta, thinks RFPs need to ask pointed questions
about financial wellness program specifics. " One of the
first questions an employer's CFO [chief financial officer] will ask
when you talk about doing a program is, 'Well, what is the return
on investment [ROI]?' So look at which vendors have ROI studies
and how compelling those studies are in demonstrating results. "
Also ask whether recordkeepers have an online financial
wellness assessment tool for employees, Kane recommends. Ask
what report employees get after they take the assessment, and
whether the provider also can give the employer a work-force-level
financial wellness assessment, based on aggregating the individuals'
results. " Does the employee report identify the key issues the
person has and suggest specific improvements [he] can make? "
Kane says. " And then how does the provider measure and benchmark
the results of the program? " -Judy Ward
New Directions for Adviser RFPs
WHAT do sponsors think about too
much-or not enough-when finding
a new adviser is the purpose for doing a
request for proposals (RFP)?
" We still see way too much emphasis
on investment monitoring in those
RFPs, " Everhart Advisors' Brian Hanna
says. " And they're often not asking as
many questions as they should about
what will make a difference in whether
the advisory firm will really add value, "
he says. " There are not enough questions
on what an advisory firm can do to
help a sponsor with areas such as ERISA
[Employee Retirement Income Security
Act] compliance, plan benchmarking and
vendor selection. "
As overseeing investments is a
primary fiduciary function, it is important
to understand an advisory firm's
investment-related processes and methodology,
says Michael Kane of Plan Sponsor
Consultants. " But if you're just looking
for an investment adviser, you're focusing
on only one aspect of what a specialist
adviser can do, " he says. " Many plan sponsors
don't realize all the other things an
adviser can do to improve the outcomes of
plan participants. "
Wealth Enhancement Group's Joe
Brummel suggests that plan sponsors ask
advisers to outline, in their RFP response,
their specific process for helping to
improve outcomes-at both the plan and
participant levels. He says to ask a broad
question about that and see where each
adviser goes with it. " It's like you give
them enough rope to do what they will
do, " he says. " If they don't know how to
answer that question, that's all you need
to know. If all they do is throw out some
features and services, and those don't tie
into a process aimed at achieving the goal,
you're not going to have the same [participant]
outcome. " -JW
PLANSPONSOR.com June-July 2018 45
http://www.plansponsordigital.com/plansponsor/june-july_2018/TrackLink.action?pageName=45&exitLink=http%3A%2F%2FPLANSPONSOR.com
PLANSPONSOR - June/July 2018

Table of Contents for the Digital Edition of PLANSPONSOR - June/July 2018
