PLANADVISER - November/December 2019 - 12

trendspotting
An Engagement Chain
Linking participants to their online account from digital communications
" There are many tools and services
made available online that just can't be
included in a paper statement. "
An extensive report published by
SPARK [Society of Professional Asset
Managers and Recordkeepers] Institute,
" Improving Outcomes With Electronic
Delivery of Retirement Plan
Documents, " echoes and emphasizes
these points. According to SPARK's
analysis, electronic delivery of plan
documents allows
participants
to
respond quickly to plan information
received; it ensures information
remains up to date and is accessed
by participants in real time; and it
provides information that can be more
readily customized. Further, electronic
delivery provides a better guarantee of
actual receipt of information.
By breaking down two anonymized
providers' salary deferral data, the
SPARK report points to substantial
differences in deferral rates across
those who have opted for electronic
delivery versus those who have not.
For Provider A, the deferral rate
THE U.S. Department of Labor (DOL)
has published the proposed version
of much-anticipated regulations to
let employers and retirement plan
providers make the electronic delivery
of mandated disclosure documents
digital by default.
Chris Spence, TIAA's senior director
of government relations, says his organization
is a big supporter of default
electronic delivery of retirement plan
documents.
provided by plan sponsors tend to be
more engaged with their retirement
planning as a whole. Of total participants
who log in to TIAA's website,
88% have elected to receive documents
electronically. Six times more
customers who receive documents
electronically log in to TIAA's website
than do customers who receive only
paper documents.
The firm also sees spikes in logins
" Why is this important?
First, we think there will be cost
savings and that these cost savings will
be passed on to individual consumers, "
Spence says. " There is also an engagement
factor to consider. "
In TIAA's experience, plan participants
who utilize the online resources
and in engagement with its digital
advice tools when quarterly statements
are sent. TIAA believes this spike is
largely due to e-delivery customers.
" When you deliver a statement electronically,
you can link people directly
to a secure website that allows them to
manage their account, " Spence notes.
of participants using e-delivery in
the ages 55 to 64 cohort was 20% of
income, compared with 9% for those in
this age range not electing e-delivery.
For the ages 25 to 34 cohort, those with
e-delivery were deferring 11%, vs. just
6% for 25- to 34-year-olds not using
e-delivery. The figures supplied by
Provider B show equally wide gaps in
deferrals across the two populations.
" Across all age classes, the particielecting
pants
electronic
delivery
defer
at a rate twice that of their
counterparts, " SPARK reports. Also of
note, retirement plan providers found
that participants choosing electronic
delivery had a greater investment
diversity.
Collectively, these higher deferral
rates and investment diversity have
led to larger account balances
electronically,
the
concludes. -John Manganaro
for
participants who receive plan communications
report
12
| planadviser.com November-December 2019
Art by Sarah Cliff
http://www.planadviserdigital.com/planadviser/november_december_2019/TrackLink.action?pageName=12&exitLink=http%3A%2F%2Fplanadviser.com
PLANADVISER - November/December 2019

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