PLANADVISER - November/December 2019 - 6

practice development
Active vs. Passive Enrollment
T
he industry's emphasis on automatic
enrollment and default investments
can mean fewer opportunities to
engage with participants, as advisers
may no longer host regular enrollment
or ongoing education meetings. To keep
participants,
and
almost completely eliminate one of the
most significant and time-consuming
annual tasks for HR professionals[-
active
open
non-participants,
from forgetting about the retirement
plan and their need to save, advisers
have a yearly, probably unexplored,
option: communicate about the plan
during benefits open enrollment time.
By working with their clients' benefits
specialists, advisers can learn the
client's approach to open enrollment
and how best to integrate a retirement
component in the current process. This
could involve site visits or just sending
information to prompt participants to
enroll or increase their deferral rate.
For the sponsor, the main decision
will be whether plan enrollment will
be active or passive.
" With an increasingly busy workforce,
the human resources [HR]
department
and
recruitment,
is often fighting to stay
on top of business initiatives, retention
well-being,
compliance
and more, " says Chase
Ambrosia, senior benefits consultant
with OneDigital Health and Benefits in
Minneapolis. This leads to an employer
preference for passive enrollment.
" Conducting a passive enrollment can
enrollment-]offering
more time for other critical organizational
goals. "
Further, some employees fail to
respond to an active open enrollment,
Ambrosia says. " With an active enrollment,
there's a greater chance of gaps
in the benefits process, " he says. " There
can be gaps in the enrollment and
financial elements that can impact
both employees and employers. " When
retirement plans do not auto-enroll, this
can delay employees' entering the plan
and qualifying to receive match dollars.
Active enrollment can also be confusing
for employees, leading to dissatisfaction
with their benefits, he adds.
Yet, passive open enrollment has
negatives, too. It works well only when
no changes are being made to benefit
programs-or to one's retirement
account, he warns. With passive open
enrollment, participants basically just
rubberstamp what they already have.
All this said, some benefits brokers
and retirement plan advisers staunchly
believe in the strengths of active
enrollment. Most of Miracle Mile Advisors'
plan sponsor clients follow the
practice, says Josh Sailar, a Certified
Financial Planner (CFP) with the firm,
who is based in Los Angeles.
" We show up and participate in the
enrollment period to educate people to
sign up for their retirement plan, " he
says. " It's an important opportunity for
us to improve participation and contribution
rates. In my experience, active
enrollment yields better results in
terms of overall plan health. "
Misty Guinn, director of benefits
and wellness at Benefitfocus in Asheville,
North Carolina, says sponsors
can overcome some of the downsides of
active enrollment by educating participants
about their benefits throughout
the year and taking a hybrid approach
whereby core benefits such as the
medical and retirement plans are
handled actively and voluntary benefits,
passively.
" I'm 100% in favor of active enrollment
periods, " Guinn says. " I view them
as really essential to my success as a
director of benefits. This gives me an
opportunity to engage with participants
and support their total well-being. "
Throughout the year, Benefitfocus
holds webinars to educate participants
about their various benefits, she says.
" Then, a week before open enrollment
goes live, we hold an on-site-and for
remote workers, a virtual-benefits
fair to help participants become more
knowledgeable. " -Lee Barney
6 | planadviser.com November-December 2019 Art by Justin Klanke
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PLANADVISER - November/December 2019

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