In my last article, I discussed the benefits of reviewing your plan document with the goal of simplifying it (ERISA and KISS: Strange bedfellows or a marriage made in heaven? from EBN May). But even if you haven't simplified your plan document, you can begin using the tenet of simplicity for communications to your participants.
What do participants want? Simplicity and ease, with a little positive reinforcement along the way. They like the same things that we as consumers like - a painless experience, no waiting, easy and simple, a feeling of sort of knowing what you're doing. And, sometimes, maybe a little fun.
Photography is one of my hobbies, and simplicity is a key consideration in taking a good photo. Why? A cluttered photo distracts the eye and takes away from the subject. Keep your participants focused on the most important topic and do not let them get distracted and overwhelmed with too much information all at once. It's easier said than done, but crisp and clear communications repeating key messages works.
Think of your plan information as an onion. The first layer provides the basics. You peel back each layer to get more detailed information. This is a perfect approach for online communications, providing links to more detailed information as you peel back the onion. This same premise works in print also. Put the basics up front and make the details accessible but less prominently displayed.
A great example leveraging simplicity is how investment options might be presented. The typical 401(k) plan has 15 to 20 investment options - pretty daunting for your average participant. For those who want to keep it simple or who want more detailed investment information, the tiered approach works well.
The first layer, for example, outlines the three basic tiers in your plan: target-date funds, core investments and brokerage window. The second layer comprises fund listings and general information, and the third layer comprises fund fact sheets. Employees can keep peeling back the onion for more details on the underlying investments or not; it's up to the preferences of the individual participant.
There are many daunting decisions for a participant, and thankfully, auto-enrollment has taken some of the anxiety out of initially enrolling in a plan. But many plans do not offer auto-enrollment or auto escalation and even if they do, you want your participants to understand what they are doing and to make knowledgeable decisions.
The decisions are tough: How much can I really afford to save? How should I invest? What should I do when the markets dramatically change or I have a life event?
Let's give them the tools they deserve and find new and innovative ways to boil down complex components to their simplest form. We don't do this because our participants are simple; we do this because simplicity is the ultimate sophistication. And our participants deserve the ultimate.
Contributing Editor Mary Nell Billings is director of benefits, Americas, for Hilton Worldwide, headquartered in McLean, Va. She holds both a BBA and MBA in accounting and finance from the University of Memphis. She can be reached at Mary.Nell.Billings@hilton.com.
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