The Future of Plan Sponsor Site Messaging

by on Sep 19, 2017

Leading financial websites across the banking, credit card and brokerage industries commonly provide secure message centers that allow customers to send messages easily to their financial institutions and often include additional capabilities. But as is often the case, retirement plan sponsor websites have not quite caught up, and only three firms—Charles Schwab, Principal and Vanguard—of the Retirement Plan Monitor – Institutional coverage group’s 14 firms provide any sort of online messaging capabilities. We encourage firms to introduce these features to their sites, and anticipate that competitors will do so, as certain messaging features can be particularly useful in the retirement space and add to the overall effectiveness of the digital plan sponsor experience.

A secure online message center saves customers time by allowing them to submit messages directly to the applicable parties when they have questions. More advanced message centers can automatically populate necessary information into message forms and allow users to attach applicable files, welcomed conveniences that save customers even more time. Currently, no Retirement Plan Monitor – Institutional firms allow sponsors to compose new messages to their recordkeepers from online message centers. Firms should consider adding this convenient capability, not only because of the complexity of certain site features, but because more plan administration roles are being taken on by Millennials, whom multiple studies have shown strongly prefer digital communications such as text messaging and emails to phone calls. Principal currently provides the most robust message center, but rather than allowing sponsors to compose new messages, they can only respond to select messages from the firm or forward certain items to registered site users along with supplemental messages.

Principal Message Center

Increasing employee engagement with company retirement plans and improving participants’ retirement readiness are tasks central to the plan sponsor role but difficult to accomplish. One way recordkeepers can help plan sponsors in this area is to allow them to broadcast messages to participant sites. Among the firms within the RPM – I coverage set, only Vanguard and Charles Schwab firms offer this capability.


Vanguard and Charles Schwab Message to Participant Forms

Recordkeepers should consider allowing sponsors to broadcast messages to specific groups of participants, letting them select employees by demographic information or retirement portfolio circumstances. This would allow sponsors to provide more targeted messaging and alerts or pass along more specialized educational materials. For example, sponsors could send reminders about catch-up contributions to participants above the age of 55 or send educational resources about the importance of saving early to younger participants who are not contributing. Another way recordkeepers can build out best-in-class broadcasting functionalities is to allow sponsors to generate messages automatically based on factors related to participants’ demographics or portfolios. This would allow sponsors to automatically send messages to participants who, for example, have just enrolled in the plan or have just reached their Social Security claiming age. A robust and intuitive message center can go a long way in helping sponsors engage and assist their participants, and it is only a matter of time before more leading recordkeepers begin providing such functionality.