Upwardly Mobile

Post on July 20, 2018

Although usage of retirement plan provider websites has failed to become as pervasive as was expected, plan sponsors may want to note that apps are becoming increasingly important to the participant experience. For one thing, they enable access by employees without computers—e.g., those who work in the field such as construction workers or retail salespeople—who access the web via phone or tablet when at home. Mobile apps may be their only real access point, according to Andrew Way, retirement manager at Corporate Insights (CI) in New York City.

Out of 20 of the leading retirement firms, 80% have an iPhone app, 80% have an Android app, and 65% have a tablet app, according to CI’s Retirement Plan Monitor group. Firms without a phone app have designed responsive websites that users can access from their phones by logging on to the site, with the data displaying in an optimized way. However, Olivia Jack, a CI analyst on the retirement team, notes that consumers are more apt to log in to an app than a mobile responsive website.

Features to Consider
The standard offerings of participant apps, CI has found, include: participant 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.”

Unique Mobile Offerings
Of the 16 recordkeepers that have created phone a app:

81% offer contribution rate transactions
62% provide retirement income projections and goals, plus gap analysis
50% have tools that update inputs and shows results for alternative scenarios
50% offer fund exchange transactions
50% provide future investment allocation management
6% offer a check scanning feature
6% allow participants to upload documents—but not checks
Source: Corporate Insights

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