PLANSPONSOR - June/July 2018 - 55

account balance, rate of return, current
contribution rate, a list of holdings, and at
least a brief transaction history.
" What has become more common are
mobile transactional capabilities-especially
contribution rate transactions and
investment election management-and
mobile apps with more robust retirement
income planners, " Jack says. (See chart.)
It is becoming standard for participants'
projected retirement income to
display when they first sign in to their
provider's app, as is also the trend on
participant websites overall. " The app
displays projected retirement monthly
income, what the participant's projected
monthly income goal should be, and the
gap between before and after, " Jack says.
" A retirement income statement is more
common than modeling tools, but those[,
too,] are getting integrated into more apps. "
According to Way, " People in their
40s or 50s are seeing their income
projection before they look at their
account balance. Account balances can
be misleading. Most people would think
that $1 million is enough, but if you are
making $100,000 per year and you use
$100,000 per year, that's only going to
last 10 years. Because of this, participants
are looking at income projections as a data
point and not just as a tool. "
Providers such as Voya, Fidelity
and Vanguard allow for participants to
integrate additional financial accounts,
making their income projections more
valuable. For example, Jack says, " By
default, Voya includes the participant's
DC [defined contribution] plan and Social
Security payments. Participants can add
their spouse's information, an annuity or
other income stream for a more holistic
view. But the apps/tools are beholden
to what data the firm has access to. The
more advanced firms allow this-some
apps also include the participant's cost of
health care. "
The Participant Experience
At Voya, the company focuses on three
things when analyzing how consumers
engage with its app-considerations that
may be of interest to sponsors when evaluating
any provider's app.
The first is ease of use-taking
advantage of native app capabilities such
as fingerprint and face identification
technologies, to make the initial log-in
process easier and more secure.
Second is making the app interactive
and educational, which the firm does
through a gamified experience. " From
when a participant first logs in, " says
Armstrong, " he sees myOrangeMoney
embedded in the front page of the experience,
indicating where the user is, relative
to being on track for a secure retirement.
The ability to use sliders and play
immediately engages him in the deeper
education about what actions he can take
to improve his outlook. "
The third area is the ability to take
action. If someone is playing with the
sliders or other features, he can easily
choose to change his savings rate or age
to adopt Social Security. These actions
can be done directly within the app.
There is no need to navigate to another
screen or place.
Usage Results
Voya analysis indicates that participants
who engage broadly online or on their
phone tend to save more than those who
do not. " When I study mobile app users
in particular, they are toward the top of
that spectrum, " Armstrong says. " They
save, on average, approximately 9%,
versus those people who don't engage at
all-web or mobile-who typically hover
KEY POINTS
* Provider apps are gaining ground because they make plan information
accessible to all participants-most notably those without a computer
on the job or in their home.
* Ease of use, gamification features-which engage the user-and
a simple means to take action are qualities a sponsor might look for
when assessing an app.
* Those who use an app save about 9%, versus those who don't engage
with either an app or the web, who typically save at around 6%.
PLANSPONSOR.com June-July 2018 55
Unique Mobile Offerings
Of the 16 recordkeepers that have
created a phone app:
81%
50%
62%
50%
50%
6%
6%
offer contribution rate
transactions
provide retirement
income projections and
goals, plus gap analysis
have tools that update
inputs and shows results
for alternative scenarios
offer fund exchange
transactions
provide future investment
allocation management
offer a check scanning
feature
allow participants
to upload documents-
but not checks
Source: Corporate Insights
at around 6%. "
" Automatic features certainly help
people get in the plan and help sponsors
increase participation rates, " he continues,
" but as people start to engage digitally-
especially since mobile apps-we believe
they are gaining additional education and
insights and ultimately saving more. "
-Judy Faust Hartnett
http://www.plansponsordigital.com/plansponsor/june-july_2018/TrackLink.action?pageName=55&exitLink=http%3A%2F%2FPLANSPONSOR.com
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