PLANSPONSOR - November/December 2017 - 26

2) Cybersecurity best practices. " Some of the
providers' websites are going through massive security changes,
because sponsors and participants are worried about security
issues, " Byers says. " Some providers have really stepped up their
game, but others have been slower to do that. "
The SeaPort Group recently did a request for information
(RFI) to understand more about recordkeepers' cybersecurity
capabilities. From that, the advisory team identified current
cybersecurity best practices. For participant websites, those
practices include requiring two-factor authentication when a
participant signs in, as well as the recordkeeper to utilize transport
layer security (TLS), a cryptographic protocol for protecting
computer networks. For mobile apps, cutting-edge recordkeepers
have begun incorporating biometrics into the participant log-on
process. And, for call centers, leading-edge providers have started
using voice recognition to identify participants, Ulmer explains.
Compass Financial Partners, also on clients' behalf, examines
recordkeepers' data security capabilities, Kelly says. " Our
clients are really looking at, 'How much does our provider
spend on cybersecurity, and what internal resources
are dedicated to ongoing cybersecurity initiatives?' "
she says. " It's not as much fun as talking
about things such as retirement readiness or
plan design innovations, but it's important. "
3) Participants' website experience.
At the participant level these days, plan
sponsors judge the value of a recordkeeper
less on its willingness to do on-site education,
DeNoyior says. They are more apt to find value in it
using behavioral economics in all participant communications
to help increase engagement, he says.
" There are many differences between recordkeepers, in the
employee web experience, " DeNoyior notes. " We're looking at,
what does the website really offer? For example, what is the first
thing that is communicated when a participant logs in? And how
does that help the participant make decisions that can improve
his or her retirement outcome? "
The value focus now relates more to whether recordkeepers
provide relevant, personalized information that helps participants
make good choices, Kelly says. So Compass looks for what
a recordkeeper offers on outcomes-based educational tools.
" What is the usage of the tools by a plan's participants? And,
if they are being used, have they resulted in positive behaviors
by those participants? " she says. " Every recordkeeper has got its
'shiny object,' but, at the end of the day, you want shiny objects
that produce results. "
Retirement income tools introduced by recordkeepers in the
past several years have helped employees begin to understand
goals-based investing, so they know their likelihood of success
and, potentially, what changes they could make to get on track,
Ulmer says. " Now, I think every significant recordkeeper has
a platform that will enable a participant to create that type of
personalized plan, " he says. " So the next issue is that it's helpful
26 PLANSPONSOR.com November-December 2017
for us to be able to pick up data from the recordkeeper on participants'
usage of those tools. "
And recordkeepers do have varying capabilities in what
Ulmer calls giving " the nudge, " meaning making the suggestion
to a participant of the next, best step to take to improve his retirement
readiness. " The idea is to help the employees understand,
in a targeted fashion, what is an actionable thing they could do
now, " he says. " We find that, on some of the better recordkeeping
infrastructure today, an employee can log onto the website and
immediately see a tailored message on his or her next best step. "
Much of participants' ultimate outcome stems from how
much money they defer, and Byers says that personalized information
helps motivate them to take action. " One of the main
things is the ability to get immediate feedback, if they are
thinking about changing their deferral, about how that will
affect their paycheck and their projected balance at retirement, "
he says. " If you can give participants immediate feedback on
those things, it's easier for them to pull the trigger and increase
their contribution. " While that may become an industry standard
in the future, he adds, it hasn't yet.
The value of personalized education goes beyond
retirement savings to broader financial wellness
topics, Kelly says, adding that customization varies
widely among providers. " We want to know: How
customized is a recordkeeper's financial wellness
program to a specific employee group? And
what is the personalized output that participants
are going to get if they utilize the program? " she
says. " We also find that, for the majority of financial
wellness issues participants face, their preference is still
for a personal interaction. Participants often just want to talk to
somebody, so we look closely at call center capabilities that back
up the online education experience. "
4) Mobile apps. For clients with a decentralized work
force, these apps play an increasingly important role, DeNoyior
says. " In those cases, one of the things we stress is that engagement
is going to have to be through 'push' messages sent through
mobile technology, because we can't sit down with those participants
to educate them, " he says.
DeNoyior sees huge differences in the strength of providers'
mobile apps. " Some mobile technology is just a mobile-friendly
version of the participant website. Some other providers have
a very basic mobile app that just gives canned information not
personalized to participants, " he says. " Then there are the real
mobile apps that [let] participants do some things-get access to
their account and use some of the tools. And, finally, there are
apps that allow for push message technology to participants and
that allow for them to fully use ... retirement readiness tools. "
He says research shows that people either get engaged by
a mobile app, or not, within 20 to 40 seconds. " If a participant
goes on the app and all it shows is the participant's balance, " he
says. " I'm not sure how helpful that will be as far as engaging the
participant. " -Judy Ward
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PLANSPONSOR - November/December 2017

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